New Zealand dairy giant Fonterra has confirmed that it has completed the partial tender offer and will acquire 18.8% of leading Chinese infant formula manufacturer, Beingmate Baby & Child Food Company Ltd. The transaction will be closed in the next few days.

Chief Financial Officer Lukas Paravicini said the companies had earlier made provision for the possibility of the Partial Tender Offer reaching slightly less than 20%.

“Our goal was to acquire up to 20%. We are extremely satisfied and confident that the partnership can and should proceed on the basis of the 18.8% stake. It is a good result.

“Over the next few weeks, Fonterra and Beingmate will now move ahead with the next phase of our partnership, which includes establishing a joint venture to purchase the Darnum plant in Australia and finalising a distribution agreement making Beingmate Fonterra’s exclusive Anmum distributor in mainland China,” said Mr Paravicini.

As part of the deal, the number of Beingmate Baby & Child Food Company Ltd shares on issue (rounded) is 1,022m and the number of shares acquired by Fonterra (rounded) 192.4m.

Last August, Fonterra and Beingmate announced that they intended to form a global partnership to help meet China’s growing demand for infant formula. The partnership will create a fully integrated global supply chain from the farm gate direct to China’s consumers, using Fonterra’s milk pools and manufacturing sites in New Zealand, Australia, and Europe. It is intended to increase the volume and value of Fonterra’s ingredients and branded products exported to China.

Meanwhile, Beingmate has recorded a preliminary 2014 net profit fall of 90.9%. Net profit was 65.7m yuan (NZ$13.9m).

Stricter regulations on products such as infant formula, and the cost of raw materials may have risen are being named by some dairy analysts as the main reason for the drop.