Fonterra Co-operative Group Ltd. settled for an 18.8-percent stake in China's Beingmate Baby and Child Food Co. Ltd. due to the fall in value of the New Zealand dollar, said analysts.
Fonterra, which announced a target acquisition of 20 percent of Beingmate shares in August, paid $553 million for the lesser shares.
The New Zealand firm said that it paid 18 yuan per share for 192 million shares, which represented a 1.7-percent premium to Beingmate's trading price of 17.68 yuan per share on Monday.
The price per share was in line with initial plans, but the total price tag of around NZ$752 million ($549.7 million) was 22-percent higher than initially forecast, reflecting the weaker currency.
"We are extremely satisfied and confident that the partnership can and should proceed on the basis of the 18.8-percent stake," said Lukas Paravicini, Fonterra Chief Financial Officer.
Paravicini noted that both firms made a provision for the tender offer possibly reaching less than 20 percent.
Fonterra wants to raise its presence in China's branded infant formula market, valued at around $18 billion in 2014 by Euromonitor. It already exports about a quarter of New Zealand's total dairy exports to China.
The world's largest dairy exporter by volume, Fonterra has already lowered expectations for Chinese dairy demand. It pegged a 4-percent increase a year through 2020, from an earlier forecast of 7 percent.
Fonterra also announced that they had not had any products held up at the Chinese border due to new import certification requirements introduced following the 1080 pest control poison threat.
An anonymous activist threatened to poison infant formula with the pesticide last November.
A Fonterra spokesman said last week that the threat had not affected their sales or orders.