Shanghai Pengxin Group Co Ltd has won approval from Chinese regulators to buy a controlling stake in a 4,000-hectare dairy farm in New Zealand, part of its strategy to meet growing domestic demand with imports.

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The takeover offer was extended to Synlait Farms Ltd on Nov 1, 2013. Shanghai Pengxin will make the purchase through SFL Holdings, in which it owns a 74 percent stake.

In a statement, Synlait said that 99.58 percent of its shareholders had accepted the offer before it closed on Jan 29. The transaction will close on or before March 11, it added.

According to media reports in New Zealand, the total offer price to be paid to shareholders is NZ$2.22 ($1.87) a share.

"All I know is the purchase is in progress. There is nothing else to say," said an anonymous official with Shanghai Pengxin on Thursday.

In 2012, Pengxin completed the purchase of 16 dairy farms in New Zealand with a total area of 8,000 ha and 16,000 dairy cows.

United Kingdom-based research firm Mintel Group Ltd said last year that the Chinese dairy market will reach 66 billion yuan ($10.8 billion) by 2017.

It forecast that domestic supplies will fall short by 15 to 20 percent of that amount, driving some Chinese dairy suppliers to invest overseas.

"China's comparatively low quality and supply shortage of dairy products pushed many Chinese dairy companies to gain overseas resources," said Song Liang, a dairy industry analyst.

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