China Shengmu Organic Milk : Announcements and Notices - (1) Major Transaction in Relation to Disposal of A Subsidiary and (2) Issue of Unlisted Warrants under Specific Mandate and (3) Irrevocable undertakings to Vote for the Share Purchase Agreement and the Warrant Subscription Agreements

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CHINA SHENGMU ORGANIC MILK LIMITED ʕ਷໋ىϞዚุ̲Ϟࠢʮ̡

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1432)

(1) MAJOR TRANSACTION IN RELATION TO DISPOSAL OF A

SUBSIDIARY AND

(2) ISSUE OF UNLISTED WARRANTS UNDER SPECIFIC MANDATE

AND

(3) IRREVOCABLE UNDERTAKINGS TO VOTE FOR THE SHARE PURCHASE AGREEMENT AND THE WARRANT SUBSCRIPTION

AGREEMENTS

References are made to the announcements of China Shengmu Organic Milk Limited (the "Company") on 24 December 2018, 27 December 2018 and 3 January 2019 (the "Announcements"), the notice of extraordinary general meeting (the "Notice") and the circular (the "Circular") of the Company both dated 7 January 2019 in relation to (i) the entering into of the Investment Agreements, among other parties, the Company and Inner Mongolia Mengniu, pursuant to which Inner Mongolia Mengniu has agreed to purchase the Sale Shares in the Target Company; (ii) the entering into of the Warrant Subscription Agreement A between the Company and the Subscriber A, pursuant to which the Company has agreed to issue to the Subscriber A, and the Subscriber A has agreed to subscribe for the Warrants A; and (iii) the entering into of the Warrant Subscription Agreement B between the Company and the Subscriber B, pursuant to which the Company has agreed to issue to the Subscriber B, and the Subscriber B has agreed to subscribe for the Warrants B. Unless otherwise defined herein, capitalised terms used in this announcement shall have the same meanings as those used in the Circular.

On 9 January 2019, Each of Kuanjie (Cayman) Investment Center LP and Saint Investment Holdings entered into an irrevocable undertaking (together, the "Irrevocable Undertakings A") in favour of the Company, China Mengniu, Inner Mongolia Mengniu and the Subscriber A that (i) all voting rights attached to the Shares for which it is the sole beneficial owner of or is otherwise able to control the exercise of as at the date of the Irrevocable Undertakings A, are exercised in favour of the resolutions to approve the Share Purchase Agreement and the Warrant Subscription Agreement A; and (ii) shall not sell, transfer, dispose of, charge, pledge or otherwise encumber or grant any option or other right over or otherwise deal in any of the Shares or enter into any agreement or arrangement with such effect prior to the EGM.

On 9 January 2019, Each of Kuanjie (Cayman) Investment Center LP and Saint Investment Holdings entered into an irrevocable undertaking (together, the "Irrevocable Undertakings B") in favour of the Company that (i) all voting rights attached to the Shares for which it is the sole beneficial owner of or is otherwise able to control the exercise of as at the date of the Irrevocable Undertakings B, are exercised in favour of the resolutions to approve the Warrant Subscription Agreement B; and (ii) shall not sell, transfer, dispose of, charge, pledge or otherwise encumber or grant any option or other right over or otherwise deal in any of the Shares or enter into any agreement or arrangement with such effect prior to the EGM.

The number of Shares held by Kuanjie (Cayman) Investment Center LP and Saint Investment Holdings and which are the subject of the Irrevocable Undertakings A and Irrevocable Undertakings B amounted to 395,235,200 Shares, representing approximately 6.22% of the total issued Shares of the Company as at the date of this announcement. The Goldman Sachs Group, Inc. was deemed to be interested in the shares held by Kuanjie (Cayman) Investment Center LP and Saint Investment Holdings under Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) as at the date of this announcement.

The Irrevocable Undertakings A shall lapse upon the termination or the non-fulfilment of the conditions precedent of the Share Purchase Agreement or the Warrant Subscription Agreement A. However, the lapse of the irrevocable undertaking in respect of one agreement does not affect the effect of the irrevocable undertaking in respect of another agreement, if the other agreement has not been terminated. The Irrevocable Undertakings B shall lapse upon the termination or the non-fulfilment of the conditions precedent of the Warrant Subscription Agreement B.

As each of the Share Purchase Agreement, the Warrant Subscription Agreement A and Warrant Subscription Agreement B is subject to the fulfilment of certain conditions precedent, the Share Purchase Agreement, the Warrant Subscription Agreement A and Warrant Subscription Agreement B may or may not become unconditional or be completed. Shareholders and potential investors should exercise caution when dealing in the Shares.

By the order of the Board of

China Shengmu Organic Milk Limited

Shao Genhuo

Chairman

Hong Kong, 11 January 2019

As at the date of this announcement, the executive directors of the Company are Mr. Yao Tongshan, Mr. Wu Jianye and Mr. Wang Yuehua; and the non-executive directors of the Company are Mr. Sun Qian, Mr. Shao Genhuo and Mr. Wen Yongping; and the independent non-executive directors of the Company are Mr. Fu Wenge, Mr. Wang Liyan and Mr. Li Xuan.