China Mengniu Dairy Co Ltd, the country's largest dairy producer, is trying to improve product safety and recover lost market share with its acquisition of a controlling stake in China's largest raw milk producer.

Mengniu will pay HK$3.18 billion ($409.8 million), or HK$2.45 per share, for a 26.9 percent stake in China Modern Dairy Holdings Ltd, which operates 22 dairy farms across the country, according to a company filing with the Hong Kong stock exchange on Wednesday.

"Accelerating and expanding investments in quality farms will allow Mengniu to establish a safer and more stable value chain in the dairy sector, to provide healthier and better quality dairy products to consumers," said Sun Yiping, Mengniu's chief executive officer.