Arla Foods is one of the largest dairy products manufacturers in Europe in terms of turnover.
The other joint venture party is Huijin (Hohhot) Real Estate Investment Consulting Co Ltd, which will take 1.0 pct stake, the company said in a statement.
Mengniu will take 50 pct of the joint venture, while Arla will own 49 pct.
The total investment of the joint venture company is 540 mln yuan and registered capital is 180 mln, it said.
Mengniu's contribution will consist of fixed assets, technology and information regarding production, while Arla and Huijin will contribute cash.
The initial term of the venture is 50 years, commencing from the date of the joint venture company's incorporation.
As of 10.40 am, China Mengniu was up 0.35 hkd or 4.02 pct at 9.05 hkd.
(1 usd = 8.00 yuan)
General Mills to expand international unit