Danone sells China baby formula unit as tightening regulations loom

French dairy titan Danone SA has sold off the China unit of its baby formula brand Dumex to Yashili International Holdings for HK$1.23 billion (US$158.7 million), Caixin reported, citing an announcement by Yashili and its major shareholder, China Mengniu Dairy. Industry analyst Song Liang said Danone’s desire to offload Dumex China due to concerns about government efforts to tighten regulation of the mainland dairy industry. The company has had trouble reviving Dumex China – once the country’s top milk powder brand in terms of sales – following a 2013 food safety scare involving a major supplier, New Zealand’s Fonterra.