China Mengniu Dairy Co Ltd said on Monday it had decided to sell part of its stake in Yashili International Holdings Ltd for HK$16.9 billion ($2.18 billion).

Singapore state investor Temasek and China-focused private equity firm Hopu were among five investors buying a stake in Yashili International, at HK$3.50 per share.

The parent company, China Mengniu Dairy, will hold 2.726 billion shares in Yashili after the sale, down from 89.82 percent of Yashili’s stock to 76.58 percent.

China Mengniu Dairy Co Ltd agreed in June to acquire privately owned Yashili International, one of the country's leading makers of infant formula and baby food, for $1.6 billion, making it the largest merger in the domestic dairy industry.

Mengniu held 89.82 percent of Yashili’s shares in August. However, Mengniu needed a 90 percent threshold to allow for a compulsory acquisition of Yashili’s remaining shares.

Mengniu is cutting its stake in Yashili to ensure the still-listed company met requirements for a Hong Kong listing.