This means three of the country's six largest dairy companies are now majority-owned by overseas interests or have significant foreign shareholding.
The remaining three are farmer-owned co-operatives.
The Overseas Investment Office has approved Bright Dairy's acquisition of 51% of Synlait Milk, a move which was initially signalled in July.
Bright Dairy will be issued with new shares in Synlait Milk which is responsible for processing and marketing Synlait's high specification formulated infant milk powder.
The proceeds of the more than $100 million deal will be used to strengthen Synlait's finances and to fund the building of a new processing plant which will double annual milk powder production to 100,000 tonnes.
Bright Dairy, China's third largest dairy company by volume, is 63.8% owned by the Chinese Government, 32.2% by China Public and the balance by Chinese banks and insurance companies.
It is listed in the Shanghai Stock Exchange and has market capitalisation of $NZ1.7 billion and last financial year it reported revenue of $NZ1.63 billion.
Bright Dairy owns 210 farms in China and it sources milk from another 500.
It also owns 23 processing factories, including the world's largest yoghurt factory.
The deal involves only the processing side of Synlait's business, not ownership of its farms which will stay with Synlait Ltd. It in turn is partly owned by Mitsui and Co of Japan.
When the deal was announced, Synlait chief executive John Penno said as well as the cash injection, Bright Dairy would allow Synlait to develop its value-added strategy while providing access to a key market with established brands and distribution channels in China, which includes daily deliveries to two million Chinese homes.
