On June 18, when the stock market closed, Mengniu Dairy issued an announcement that it had bought all the shares of Yashili Dairy, and the price per share is about HK$ 3.50. This deal may possibly involve over HK$ 11billion as the largest acquisition in China's dairy history, it also marked an significant signal Mengniu sounded that it would take big moves in China's milk powder stage.

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With its headquarter locates in Guangdong Province, Yashili was founded in 1983, now it currently employs over 5000 staff with a property of over 1 billion yuan. It mainly produces dairy products, and is also engaged in food, nutrition and health, package and print industries. Yashili now owns seven companies and has five large manufacturing bases in Chaozhou City and Guangzhou City of Guangdong Province, Qiqihar City of Heilongjiang Province, Suzhou City of Shanxi Province and Zhengzhou City of Henan Province, with a total area of more than 1000 mu.

In July 2009, COFCO ( China Oil & Foodstuffs Corporation) became the largest shareholder of Mengnui which was founded in August 1999, and in July 2009, Yu Xubo, the president of COFCO took over Nui Gensheng's(Mengnui's former president) position as the Chairman of Mengnui Group.

According to the earnings statistics of Mengnui 2012, it produced 7.58 million tons of dairy products in total last year, nevertheless, milk powder only took 1.6% in its whole earnings.

Public figures show that, as to the proportion that various milk powder manufactures took in China's market in 2012, Erie stood in the sixth with 7.6%, Yashili, the eighth, 4.5%, while Mengnui even did not enter the top ten.

Zhangze, an expert in dairy industry, pointed that this acquisition might change the competitive status quo of Chinese milk powder market.