Chinese infant formula manufacturer Beingmate Baby & Child has revealed more details of a strategic partnership with a state-owned investment firm Great Wall Guorong Investment.

The company has confirmed Great Wall will take a 5.09% stake in Beingmate by acquiring 52 million shares previously held by Beingmate's controlling shareholder, Beingmate Group, which is owned by founder Xie Hong.

Great Wall is paying 5.46 yuan per share, representing a small premium to Beingmate's recent share price of 5.25 yuan. The total consideration is 284m yuan ($59.7m).

The acquisition means Beingmate Group's stake will fall from 34.21% to 29.13% and Great Wall's Changhong Fund will replace JVR International as Beingmate's third largest shareholder, behind Fonterra with 18.8 per cent.

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JVR is controlled by He Xiaohua, the current vice chairman of Beingmate.

Fonterra did not mention the transaction when it reported its first quarter financials last week. Although it did confirm it had begun unwinding the Beingmate joint venture at Darnum in Victoria.

Fonterra paid 18 yuan per share for its 18.8% stake in Beingmate for an outlay of $755m, less about $90m it received from the sale of a half share in the Darnum powder plant.

Fonterra is reviewing its investment in Beingmate but appears undecided about whether to try and sell out given the potential opportunity presented by the arrival of Chinese backed investment funds.