HONG KONG (Sept 17): Biostime International Holdings, the Chinese infant formula producer, agreed to buy about 80% of Australian health supplement maker Swisse Wellness Group Pty for more than US$900 million ($1.3 billion), a person with knowledge of the matter said.

The deal values closely held Swisse Wellness at about US$1.2 billion, the person said, asking not to be identified as the information is private. Biostime will use internal cash and seek a bridge loan to fund the acquisition, according to the person.

Concerns over food safety and health are driving the demand for foreign-produced vitamins and health supplements in the world’s second-largest economy. Sales of vitamin and dietary supplement in China almost doubled in the past five years, according to market researcher Euromonitor International.

Melbourne-based Swisse Wellness, which is controlled by the family of founder Kevin Ring and management, sees an “enormous” opportunity in China, Chief Executive Officer Radek Sali said earlier this month.

Shares of Biostime were halted from trading in Hong Kong on Thursday, pending an announcement. The baby formula maker had 4 billion yuan ($877 million) cash and equivalents at the end of June, according to data compiled by Bloomberg.

Sarah Chibnall, a spokeswoman for Swisse Wellness, didn’t immediately reply to a voice mail seeking comment, while a representative for Biostime declined to comment. The Australian Financial Review reported earlier Thursday that Biostime won the auction for Swisse Wellness, citing unidentified people.