China’s Bright Dairy & Food is planning to buy the raw-milk supply operations of Shanghai Dairy Group from its state-owned parent Bright Dairy Group for an undisclosed amount.

The acquisition is aimed at consolidation of more dairy operations under its primary listed arm, reported Bloomberg.

The deal would include Shanghai Dairy Group’s cattle-breeding operation that comprises 24 dairy farms housing more than 35,000 cows.

The Bright Food Group is controlled by the Shanghai government. The current initiative will join the company with the state-owned Cofco in an effort to boost competitiveness by merging some of its contrasting businesses.

Bloomberg quoted a Shanghai-based analyst at Capital Securities Li Xiaolu as saying: "This is a good news for Bright Dairy. The proposed purchase would help it secure long-term raw milk supply at a relatively stable cost."

The Shanghai Dairy public-relations representative said that the company is currently holding discussions with Bright Dairy & Food over the price of the transaction.

According to the company, the move will help Bright Dairy boost its beverage sales in China by supplying reliable raw milk.

Headquartered in Shanghai, the company had annual revenue of $19bn in 2014. Recently, Bright Dairy & Food also said that it is planning to acquire Bright Food Group’s stake in its Israel-based dairy producer Tnuva Food Industries, for CNY9bn ($1.45bn).

The company had also announced last month that it is planning to merge with government-controlled edible oil maker Shanghai Liangyou Group.