WhiteWave Foods signs JV deal with Chinese dairy firm

US food and beverage firm WhiteWave Foods has signed a joint venture (JV) agreement with China Mengniu Dairy to manufacture, market and sell a range of nutritious products.

The deal is part of the company’s strategy to expand into new markets, and it provides the company with access to the Chinese nutritious products segment.

As per the deal, WhiteWave will hold a 49% share in the JV, while the remaining 51% will be held by the Chinese firm.

The JV is subject to the receipt of various approvals from the Chinese Government, which are expected in the first half of 2014.

WhiteWave chairman and CEO Gregg Engles described Mengniu as a leading dairy company in China, with a broad product portfolio, strong sales network and manufacturing capabilities, deep consumer expertise and a wide distribution network throughout the country.

"Through the joint venture, WhiteWave will be extremely well positioned to expand its business to this important geography," Engles added.

In addition, the parties have also signed a deal to take over Yashili International’s subsidiary Yashili Zhengzhou for $85m, subject to the formation of the JV and approval of the minority Yashili shareholders.

The JV plans to manufacture its products at Zhengzhou’s manufacturing site, which is currently under construction in China.

WhiteWave and Mengniu intend to make additional investments to back the start-up and commercialisation of the venture.