China’s largest dairy company Yili Group said on Thursday it will bid “about $850m” for Stonyfield, the US organic yoghurt company owned by France’s Danone.

The bid for all of Stonyfield’s shares is in a “preparatory stage”, Yili said in a statement to the Shanghai stock exchange. Danone is selling Stonyfield as part of an agreement with US regulators for winning approval to buy soy milk company WhiteWave for $10bn.

Sales of high-end organic dairy products are growing rapidly in China as middle class consumers upgrade to more premium brands. The offer comes just weeks after Yili dropped plans to acquire a 37 per cent stake in local organic producer China Shengmu Organic Milk, the country’s largest organic producer, because of anti-monopoly concerns.

Yili had a turnover of $9.3bn in 2015, according to Rabobank, making it China’s largest dairy group, and the tenth largest in the world. Its shares rose 0.9 per cent on Thursday on news of the bid, against a 0.3 per cent rise for the Shanghai Composite Index.

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