On Tuesday, Mengnui Dairy Co Ltd signed a second takeover deal in a month. The deal stated an offer to buy Carlyle-backed Yashili International Holdings Ltd. The deal was priced US$1.6 billion as a part of its expansion plan for its milk powder business.

Yashili sources its products from New Zealand. The deal with the company marks a new move for the milk industry in China. This was to consolidate the country's market after several tainted milk scandals that dull the sector.

Since May, this is also the second time that a US private equity firm exited a profitable investment in a Chinese milk company.

Yashili's shareholders were offered HK$3.50 per share piece by Mengniu. In a statement given to the Hong Kong Stock Exchange, the buyer also offers a second option priced at HK$2.82 in cash per share. The option also included 0.681 per share in a Mengniu-backed acquisition holding company.