The acquisition would give Mengniu more control over its milk supplies in a dairy market which has witnessed several serious food safety issues in recent years.
Dangerous levels of toxins were found at a Mengniu warehouse in 2011 – a discovery blamed by the firm on contaminated feed given to cows.
Mengniu is currently supplied by Maanshan-based Modern Dairy with unpasteurised milk.
However, Frank Ning, Mengniu’s chair admitted at a Hong Kong conference yesterday that the two parties were still some way from agreeing a deal.
“We have been talking, but haven’t made any good progress,” he said.
Ning added that there is no timeline in place.
Shares in Modern Dairy surged 9.9% to their highest level since June 2011 but Mengniu’s slipped 2.1%.
