POWER ARTERY: Technicians inspect an ultra-high voltage grid in southwest China's Chongqing on June 18. The grid is part of plans to transmit hydropower from the region to the country's east (LIU CHAN)

Dairy Consolidation

Mengniu Dairy Co. will acquire smaller rival Yashili International Holding for $1.47 billion to form the largest merger in the domestic dairy industry, as it seeks to boost its milk powder business.

The all-cash offer is a 9.4-percent premium over Yashili's closing share price of HK$3.20 ($0.41) on June 13 at the Hong Kong Stock Exchange. A separate offer involving cash plus a share-swap is valued at 912 million yuan ($148.75 million) and covers 1.2 billion shares.

"Mengniu is eager to boost its yogurt and milk powder businesses in order to reduce reliance on liquid milk products and raise profitability," said Jian Aihua, a food industry analyst with the market research company CIConsulting.

Liquid milk accounted for 89.6 percent of Mengniu's revenue last year, while milk powder made up only 1.6 percent.

Inner Mongolia-based Mengniu has unveiled a string of investments this year and collaboration with French food group Danone as it seeks to consolidate its market position.

Foreign Trade Flunk

China will have to overcome many difficulties in order to achieve the 8-percent foreign trade growth target set for 2013, Shen Danyang, spokesman for the Ministry of Commerce, said on June 18.

The sharp slowdown in foreign trade growth seen in May reflects the grim and complicated trade outlook for 2013, Shen said at a press conference.

China's foreign trade growth slowed sharply in May, partly due to government rules to curb capital inflows disguised as trade payments.

Exports inched up just 1 percent year on year to $182.77 billion, while imports declined 0.3 percent to $162.34 billion, according to customs data.

Shen said the rising yuan and weak external demand have negatively impacted exports and limited strength in the domestic economy and slumping international commodities have limited import growth.