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SINGAPORE, April 2 (Reuters) - 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 Wednesday
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 under discussion..
"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 company's total.
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)