Several plants affiliated to Sanlu, one of the companies affected by the poisoned milk scandal, are likely to be sold.
Through its investment in Sanlu, Fonterra Cooperative Group effectively took a share of more than 40 affiliated plants that are interconnected.
Fonterra holds 43 percent of the shares in Sanlu but has already written down $139 million worth of its investment’s book value.
At least four babies died, and another 53,000 were made ill by adulterated Chinese milk powders containing melamine.
The Beijing Review said today that Sanlu expects to have to pay compensation claims totalling 700 million yuan ($NZ188 million) to consumers whose infants became sick or died after drinking its tainted baby formula.
Beijing-based Sanyuan Group is reportedly set to acquire Sanlu’s seven key affiliate milk plants in Shijiazhuang, capital of Hebei Province.
The Wondersun Dairy Co Ltd, based in Heilongjiang Province in northeast China, is also expected to buy a plant in that province.
But details about the acquisitions and disposals of Sanlu’s other factories around the country remain unclear.
. . . Men Haitao, a spokesman for Sanyuan, told the Beijing Review that the acquisition talks with Sanlu were not finished and declined to give further details.
The analysts said the Sanlu brand was almost certain to disappear from the market given the acute damage to it.