Mengniu's cash price represents an enterprise value of 30 times Bellamy's normalised full-year earnings before interest, tax, depreciation and amortisation (EBITDA).
On consensus earnings, a2 Milk is trading on 20.6 times its 2020 forecast EBITDA.
The Bellamy's board has unanimously recommended that shareholders vote in favour of the scheme.
Australian fund managers regularly lump Bellamy's - which specialises in making organic infant formula - with a2 Milk, which makes formula using milk containing just the a2 beta protein.
Shane Solly, portfolio manager at Harbour Asset Management, said Mengniu was offering a "massive" premium.
"The implied multiple on that is quite supportive for the a2 Milk share price," he said.
"It's a bit of difference in terms of valuation," he said.
Bellamy's - like a2 Milk - attracts short selling - the sale of a share that the seller has borrowed.
The short seller profits if the share price declines by picking it back up later at a lower price, but when the market turns in the stock's favour, the shift higher can make the move more dramatic than it would do otherwise, triggering a short-covering rally.
Solly said it looked like a short-covering rally was already taking place with a2 Milk.
"It's a reminder that there is a good underlying business within a2 Milk that is attractive to global buyers," he said.
"Based on this transaction, it makes a2 Milk look undervalued," he said.
A2 Milk is also understood to be conducting an investor education day in Shanghai this week.
Mengniu is one of the leading dairy product manufacturers in China and is listed on the Hong Kong Stock Exchange.
The company has manufacturing sites in New Zealand and Indonesia, and is rated by Rabobank as being in the top 20 list of global dairy companies.
