SGDI, the largest goat milk powder brand in Shaanxi, had revenue of 1.38 billion yuan in 2013. It produced 9,000 metric tons of milk powder of that year, almost one-third its the province's total.

With about 90,000 retail outlets nationwide, SGDI's goat milk powder products are to be introduced to more customers, Leng said.

The chairman said the deal will support Feihe's goal of achieving 20 to 30 percent annual growth over the next five years. Last year, revenue increased 30 percent to more than 3 billion yuan.

He said the goat milk powder business is expected to increase at least 100 percent year-on-year.

It's not the first acquisition for Feihe this year. On Jan 14, the company said it would acquire Jilin Alfbeta Dairy Co Ltd, which distributes formula for infants and children.

Unique locations in Northeast China and advantages in dairy sources and distribution channels were said to be incentives for Feihe to make its latest acquisition.

Song said the nation's plan for dairy industry consolidation, to be released by the Ministry of Industry and Information Technology, will seek to raise industrial concentration to 65 percent among the top 10 domestic brands by the end of 2015.

The plan will also aim to cut the number of formula milk dairy enterprises to 87 from 127 at present.

By the end of 2018, the plan aims to develop three to five large dairy enterprises, with domestic brand concentration reaching 80 percent among the remaining 50 enterprises.

The ministry is likely to announce tax and financing policies for the dairy industry.

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