China's Cofco in talks to buy Noble Group's agribusiness business
04 March 2014
China's state-owned food giant Cofco Corp is in talks to buy global commodities trader Noble Group Ltd, in a bid to acquire its agribusiness unit in a deal that would value the division at around $1 billion, Reuters today reported, citing people familiar with the matter.
The talks come just a few days after Cofco, China's biggest grains trader, offered to buy a majority 51-per cent stake in Dutch grain trader Nidera. (See: China's Cofco buys majority stake in Dutch grain trader Nidera to secure country's food supply)
Reacting to the Reuters report, Singapore-listed Noble Group said in a statement that it was in talks to potentially form a joint venture around its agriculture unit with a consortium. Noble did not say whether Cofco was part of the consortium.
"No binding arrangements have as yet been entered into with respect to this transaction and, accordingly, there can be no assurance that this transaction will be concluded," the statement added.
Noble's agri business comprises grains and oilseeds, sugar, cocoa, cotton and coffee. The business is the company's smallest by revenue, accounting for about 16 per cent or $15.5 billion of sales in 2013, according to data compiled by Bloomberg.
Noble, in which China's sovereign wealth fund CIC holds a 15-per cent stake, manages a global supply chain of agricultural, industrial and energy products.
It has a diversified portfolio of essential raw materials, integrating the sourcing, marketing, processing, financing and transportation through 100 offices in more than 40 countries.
Noble has interests in coal and iron ore mines, grain crushing facilities, sugar and ethanol plants, fuel terminals and storage facilities, vessels, ports and other infrastructure.
It sources raw materials from low-cost producers such as Brazil, Australia and Indonesia and supplies to high-growth markets including China, India and the Middle East.
Cofco is China's largest food processing, manufacturer and trader and also has an extensive business portfolio covering branded consumer foods, packaging materials and products, hotels & real estate, finance and others.
A Fortune 500 company, Cofco is the largest shareholder in China's largest dairy company China Mengniu.