Inner Mongolia Yili Industrial Group Co., China’s biggest dairy producer, has been linked with making a move for infant-formula firm Ausnutria.

According to news agency Bloomberg, citing people familiar with the matter, Yili, as it is more commonly known, has been speaking with banks about financing a possible acquisition of Hong Kong-listed Ausnutria.

However, the news agency’s sources qualified their comments by stressing deliberations are on-going and there is no certainty they will lead to a formal bid.

Ausnutria, which has its main headquarters in the Netherlands, counts Chinese state-backed investment firm CITIC as its largest investor at present. It sells products in China, North America, the Middle East and parts of Europe, according to its website.

Its products include infant-formula based on goat milk and organic cows’ milk made under the Kabrita and Neolac brand names.

Bloomberg said Ausnutria has a market value of about US$1.8bn.

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Just Food has asked both Yili and Ausnutria for a response to the story.

In May, Yili was linked with a bid for Reckitt Benckiser’s infant-formula business in China.