CH MODERN D (01117) surged nearly 5% before noon, reaching a 4.96% increase at HK$1.27 by the time of writing, with a trading volume of HK$10.3741 million. The company recently announced the acquisition of approximately 1.28% of CHINA SHENGMU's shares for HK$37.52 million.

Upon completion of the deal, CH MODERN D and its concert party, Mengniu, will see their combined stake exceed 30%, up from 29.99%, triggering a mandatory offer. CH MODERN D will purchase the remaining shares of CHINA SHENGMU at HK$0.35 per share, with the total cost potentially reaching HK$2.016 billion.

This transaction is viewed as an integration of upstream resources for Mengniu, the controlling shareholder of CH MODERN D and the largest shareholder of CHINA SHENGMU. Post-acquisition, the merger is expected to create a "powerhouse alliance."

The combined herd size is projected to surpass 610,000 cattle, with annual raw milk output exceeding 4 million tons, positioning the merged entity among the world's leading dairy farming enterprises. The scale effect is anticipated to significantly enhance bargaining power in bulk material procurement, such as feed, effectively reducing per-unit production costs and solidifying a competitive industry advantage.