HONG KONG, June 6 Private equity firms Yunfeng
Capital, founded by Alibaba Group Holding Ltd's Jack Ma, and
CITIC Private Equity Funds Management (CITIC PE) have agreed to
invest at least 2 billion yuan ($320 million) in a unit of Inner
Mongolia Yili Industrial Group Co Ltd, the dairy
products company said in a statement.
Yunfeng and CITIC PE, a unit of China's CITIC Group Corp
, will buy 60 percent of Inner Mongolia Yili Livestock
Development Co Ltd, Inner Mongolia Yili Industrial said.
The investment is Yunfeng's first in China's food sector,
according to S&P's CapitalIQ database. Its past investments are
focused in technology, media and telecommunications.
The deal underscores a trend for private equity investors
buying into China's food industry as the government works to
improve food safety.
Inner Mongolia Yili Industrial is one of China's biggest
milk powder makers, and operates in a sector where China has
announced moves to support domestic "champions" who will be able
to compete against global rivals.
Milk powder has been a sensitive topic since 2008 when milk
tainted with the industrial chemical melamine killed at least
six infants and left thousands ill.
CITIC PE is headed by Liu Lefei, the son of politburo member
Yunfeng recently closed a new investment fund after raising
($1 = 6.2548 Chinese Yuan Renminbi)
(Reporting by Stephen Aldred; Editing by Christopher Cushing)