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Deals

Lansing Trade Group says sells 20 percent stake to New Hope Liuhe Co.

CHICAGO (Reuters) - U.S. grains and energy merchant Lansing Trade Group LLC sold a 20 percent stake of its business to Chinese animal feed maker and meat processor New Hope Liuhe Co 000876.SZ, a Lansing official said on Tuesday.

The cash deal closed on Friday, said Tom Carew, Lansing Trade Group executive vice president. He declined to provide financial terms.

New Hope Liuhe said in October it was setting up a wholly owned U.S.-based subsidiary, which would invest $127.50 million to acquire a 20 percent stake in a U.S. trading group.

Kansas-based Lansing has 17 grain elevators with capacity to store 33 million bushels, according to industry data. The privately held company, with offices in North and South America, Britain and China, trades corn, wheat, soybeans as well as energy products such as ethanol.

Lansing also is a major trader of distillers’ dried grains with solubles (DDGs), a protein-rich animal feed that is a byproduct of ethanol. China is the top importer of U.S. DDGs, however, the country has slowed its buying in recent months after Beijing cut its domestic corn price.

“We have a pre-existing customer supply arrangement, and we do anticipate with this relationship increased business between Lansing and New Hope,” Carew said.

Chinese trading houses have been buying up agricultural commodity assets globally, aiming to better control their food supply.

State-run grain trader COFCO invested $2.8 billion in about a year in joint ventures with global trader Noble Group Ltd NOBG.SI and with Dutch grader Nidera while Chinese pork processor WH Group Ltd 0288.HK bought the largest U.S. pork processor Smithfield Foods [SFII.UL] for nearly $5 billion in 2013.

Reporting by Michael Hirtzer and Karl Plume; Editing by Chizu Nomiyama and David Gregorio

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