Mengniu Dairy Co Ltd's milk products at a trade show in Beijing on May 1. Photo: China Daily

China's Mengniu Dairy on Monday reached an A$600 million ($407 million) deal to acquire a third Australian drinks brand. The company announced its newest purchase following the acquisitions of Aussie dairy companies Burra foods and Bellamy's Organic. 

Analysts say the merger can bring the complementary advantages of the China-Australia dairy industry into full play. 

Mengniu inked a deal on Sunday to buy 100 percent of shares in Lion - Dairy & Drinks, an Australian company specializing in dairy products and beverages, the company announced on Monday in its Hong Kong Exchanges and Clearing (HKEX) transaction disclosure.

Mengniu said the acquisition is an important step in its international strategy and another important layout in Australia after Bellamy's, according to a press release sent to the Global Times on Monday. 

"It will help Mengniu form a complete and competitive regional business, form a more complete and efficient global supply chain, and provide more high-quality brands and dairy products to consumers in China, Southeast Asia, Oceania and other regions," read the press release.

The Chinese company had just recently acquired Bellamy's, an Australian organic infant milk powder and auxiliary food brand, in September. 

Through its merger with Lion, Mengniu will integrate Bellamy's, Burra and other Australian businesses to form a cluster to the scale of nearly 10 billion yuan. It is expected to become the largest dairy enterprise in Australia, according to industry insiders.

Australia's dairy industry chain is mature and its products diversified, whereas China's market is vast and its huge output every year is still unable to meet demand, said analysts.

China produced 43.05 million tons of milk in 2018 and is expected to produce 45.13 tons of milk in 2019, according to iiMedia data.

This is not the first time that Lion has sold its business. Canadian dairy company Saputo completed the acquisition of Lion's specialty cheese business in October 2019, at the price of A$280 million.

"Dairy Farmers is the star brand of Lion, which takes approximately 40 percent of total market share as medium-level fresh milk," Hao Yan, training specialist of the Association of Chartered Certified Accountants, told the Global Times on Monday. He has lived in Sydney for more than 10 years.