U.S. PE firm KKR to purchase China's Mengniu Modern Farm

New York- based Kohlberg Kravis Roberts (KKR), one of the world's biggest private equity firms and a pioneer of the leveraged buyout industry, will invest US$100 million in raw-milk producer Maanshan Modern Farm as part of a consortium, sources reported.

Maanshan Modern Farm, also known as Mengniu Modern Farm, is an Anhui province-based private firm set up in 2005 by former top managers of China Mengniu Dairy Company Ltd<2319>, which has five farms and 40,000 dairy cows across provinces in the north China, including a flagship farm in Mongolia.

KKR is expected to spend US$100 million in buying the company. A further US$150 million will be spent on developing the site, with the money coming from other investors.

KKR comes at a time when the country's dairy sector is recovering from a massive tainted milk scandal, experts said, adding KKR's investment was a "vote of confidence" in the sector's future.