China Shengmu Organic Milk : Announcements and Notices - Completion on Major Transaction in Relation to Disposal of A Subsidiary

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CHINA SHENGMU ORGANIC MILK LIMITED

中 國 聖 牧 有 機 奶 業 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1432)

COMPLETION ON MAJOR TRANSACTION IN RELATION TO

DISPOSAL OF A SUBSIDIARY

References are made to the announcements of China Shengmu Organic Milk Limited (the "Company") dated 24 December 2018, 27 December 2018, 3 January 2019 and 11 January 2019 respectively and the circular of the Company dated 7 January 2019 (the "Circular") in relation to, among other things, the Investment Agreements and the transactions contemplated thereunder. Unless otherwise defined, capitalized terms used in this announcement shall have the same meanings as those defined in the Circular.

The Board is pleased to announce that all conditions precedent under the Share Purchase Agreement (or otherwise waived) have been fulfilled and the completion of the Share Purchase Agreement took place on 20 May 2019 in accordance with the terms and conditions of the Share Purchase Agreement.

Upon completion of the Share Purchase Agreement, Inner Mongolia Mengniu and the Company hold 51% and 49% interests respectively in the Target Company. The Target Company ceases to be recognised as a subsidiary in the consolidated financial statements of the Company, and is expected to be recognised as a subsidiary of Inner Mongolia Mengniu in its consolidated financial statements.

By Order of the Board

China Shengmu Organic Milk Limited

Shao Genhuo

Chairman

Hong Kong, 20 May 2019

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