Chinese dairy company Mengniu Dairy has signed an agreement with Kirin Holdings and Lion to acquire the Lion Dairy & Drinks business in Australia for A$600m ($407m).

Under the deal, Mengniu Dairy will acquire complete white milk, milk-based beverages, juice, yoghurt and water ice brands and assets.

The company will also acquire Lion Dairy & Drinks’ International business, as well as Dairy & Drinks share of the joint ventures Vitasoy Australia Products and Capitol Chilled Foods Australia and Dairy & Drinks licensing agreement for the Yoplait brand.

Lion CEO Stuart Irvine said: “Bringing the businesses together will help drive Mengniu Dairy’s growth in the Australian domestic market, while also accelerating Dairy & Drinks’ aspirations in South East Asia and China.

“In addition, Dairy & Drinks will benefit from access to leading-edge dairy research and development capability and further investment as part of the Mengniu business.”

Completion of the deal is subject to approvals from the Australian Competition and Consumer Commission (ACCC), the Foreign Investment Review Board and other standard closing conditions.

Once approved, the deal will mark Lion’s full divestment of the Dairy & Drinks business in the Australian market.

Irvine added: “The full divestment of the Dairy & Drinks business will ensure it has an owner that is well placed to grow the business over the long term, while also accelerating Lion’s pivot to becoming a leading global adult drinks business.”

Lion added that the sale process does not have any impact on its alcohol businesses in Australia and New Zealand and its global Lion Little World Beverages business.

Last month, Saputo completed the acquisition of the speciality cheese business of Lion Dairy & Drinks for A$280m ($191m), on a cash-free and debt-free basis.

The latest sale will represent a full divestment of the Dairy & Drinks business.