Australia's Freedom Foods Group Ltd says it wants to exercise an option to take a further 18.7 million fully-paid ordinary shares in Auckland-based dairy company A2 Corporation Ltd.
Freedom Foods had an option to buy the shares at A11 cents each to boost its stake in A2 Corp.
A2 directors said the shares will be issued on August 3.
The company will pay $NZ2,599,094 ($A2.08 million) -- the equivalent of NZ13.64c a share -- and will have a total stake of 26.4 per cent, including partly-paid ordinary shares on issue.
A2 Corp has said it will commission its own processing plant in south-west Sydney next January to meet a growing demand for A2 milk in Australia.
The new $A7.5 million factory will process 10 million litres of milk a year, some of it additional to 20 million litres of milk already supplied by contractors.
A2 Corp last year gave ASX-listed Freedom a 25 per cent stake after its shareholders approved a deal to buy up the remaining 50 per cent stake in Australia's A2 Dairy Products Pty Ltd that they did not already own.
The deal gave A2 Corp exclusive rights for the production and sale of A2 milk products in Australia and Japan.