The dairy group will sell the stake to Shijiazhuang Penghai Venture Capital Fund and corporate management firm Shijiazhuang Junqian Enterprises Management Corp Ltd as it focuses on its core businesses and expansion of premium dairy products.

China Mengniu, which expects to gain 3.43 billion yuan before taxation from the disposal, said the deal would strengthen its balance sheet and overall financial position, and proceeds would be used for general working capital and to facilitate future investment opportunities.

(Reporting by Donny Kwok; Editing by Subhranshu Sahu)