SINGAPORE, April 2 China's largest grain trader
COFCO Corp will pay an initial $1.5 billion to buy a 51 percent
stake in Noble Group Ltd's agribusiness, Noble said on
The two companies plan to form a joint venture, in which
Noble will retain a 49 percent stake, that will link COFCO's
grain processing and distribution business with Noble Agri's
grain origination and trading business.
Reuters reported in early March that the deal, which will
help China develop a powerful agricultural trading house, was
"Noble Agri's supply chain management system and origination
capabilities complement COFCO's logistics, processing, and
distribution network in China," COFCO chairman Frank Ning said
in a statement.
A consortium of investors led by China-focused private
equity firm Hopu will join COFCO as minority investors in the
acquisition and will hold a third of the investment vehicle that
is making the purchase.
Noble's agricultural division generated $15.5 billion
revenue last fiscal year, accounting for about 16 percent of the
COFCO and Noble still need to obtain regulatory and
shareholder approval for the deal and the final price will be
adjusted so that when completed the payment will be equivalent
to 1.15 times 51 percent of the audited book value of Noble Agri
for the 2014 financial year.
(Reporting by Rachel Armstrong; Editing by Richard Pullin)