CHINA Mengniu Dairy Co closed 0.7 percent lower at HK$21.70 (US$2.98) following an announcement that it would acquire a smaller dairy maker for US$71 million. In the morning session Mengniu's shares rose as high as 4.4 percent in Hong Kong - the most in more than 2 months. Mengniu, the nation's biggest producer of liquid milk, said it will buy 51 percent of Junlebao Dairy as it seeks to raise market share of yogurt products to more than 30 percent. Hebei-based Junlebao has the largest yogurt production plant in northern China and sales hit 1.26 billion yuan in 2009, according to its website. The merger with Junlebao will help Mengniu secure its market share by diversifying product portfolio and sales channels, Deutsche Bank said in a note yesterday. It rated shares of Mengniu as a "buy." Mengniu aims to become one of the world's top 10 dairy giants and expects its annual revenue to reach 50 billion yuan (US$7.5 billion) in five years from 25.7 billion yuan in 2009, President Yang Wenjun said at a press conference on Monday. Junlebao also expects its revenue to at least double to 3 billion yuan in the next five years, Yang added. Deutsche Bank estimates Mengniu's profit at 1.29 billion yuan in 2010 and 1.69 billion yuan in 2011. Junlebao will keep its own brand as well as management team and Mengniu will appoint four directors to its board of seven.