China Modern Dairy Holdings Ltd. (CMD) completed the purchase of 107.20 million shares in China Shengmu Organic Milk Limited (CSM) on 22 May 2026, paying HK$37.52 million in cash. The transaction, executed through separate Share Purchase Agreements with several selling shareholders, represents 1.28% of CSM’s issued share capital.

Immediately after completion, CMD and its concert parties—including Start Great Holdings, a wholly owned subsidiary of China Mengniu Dairy—own 2.62 billion CSM shares, or 31.26% of the company, up from 29.99% prior to the transaction. Crossing the 30% threshold obliges CMD to launch a mandatory conditional cash offer under Rule 26.1 of Hong Kong’s Takeovers Code.

CLSA Limited will act on CMD’s behalf to acquire all remaining CSM shares not already held by CMD or Start Great at HK$0.35 per share in cash. The Composite Document, containing full terms of the offer, the timetable, and the independent financial adviser’s opinion, is scheduled for dispatch to CSM shareholders on or before 29 May 2026.

Post-transaction shareholding in CSM is as follows: • CMD: 107.20 million shares (1.28%) • Start Great: 2.51 billion shares (29.99%) • Total CMD concert group: 2.62 billion shares (31.26%) • Executive director Zhang Jiawang: 171.43 million shares (2.05%) • Other public shareholders: 5.59 billion shares (66.69%) • Total issued shares: 8.38 billion

CMD and CSM advise shareholders and potential investors to exercise caution when dealing in the shares of both companies pending publication of the Composite Document and completion of the offer process.