(Yicai Global) May 9 -- Danone intends to bring to a close its nine-year partnership with China Mengniu Dairy, a year after the French food giant sold all of its shares in China’s second-largest dairy products maker.

The alliance will end following completion of three final equity deals, according to statements the two firms released on May 6.

Danone will buy back all the shares of milk powder maker Dumex China that it sold to Mengniu unit Yashili International Group in 2016, and Mengniu will buy back Danone’s 25 percent of Yashili and its 20 percent of two joint ventures set up in 2013.

The transactions will be concluded this year at the earliest. Mengniu then plans to acquire a remaining 24 percent of Hong Kong-listed Yashili [HKG: 1230] and take it private.

The Dumex share sale is worth about CNY870 million (USD130.5 million), while that of the JV stakes is about CNY16 million (USD2.4 million), according to Mengniu. The Yashili deal is worth about HKD1.4 billion (USD178.3 million), based on HKD1.20 (15 US cents) per share.

The transactions are follow-ups to Danone’s divestment of its Mengniu shares and will not impact its long-term strategy, the Chinese dairy giant told Yicai Global. They deals will help Hohhot-based Mengniu optimize resources allocation and increase management efficiency, it added.

The pair began working together in 2013, when Paris-based Danone bought a 4 percent stake in Mengniu. In 2014, Danone, COFCO, and Denmark's Arla Foods formed COFCO Dairy Investments, a JV through which they owned 9.8 percent, 16.3 percent, and 5.3 percent, respectively, of Mengniu.

The partnership began to fall apart when Danone announced last May that it had sold its entire stake in Mengniu for HKD15.4 billion (USD2 billion). The synergy was weakening with the development and changes in the pair’s businesses, a dairy industry analyst told Yicai Global.

Mengniu's net profit soared 44 percent to CNY5 billion (USD749.3 million) last year thanks to rapid growth at its high-end milk business, its earnings report showed. Revenue was CNY88.1 billion (USD13.2 billion), up 16 percent, placing it second only to Inner Mongolia Yili Industrial Group among domestic diary firms.

Editors: Dou Shicong, Futura Costaglione