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COFCO merger to help China import more grains

BY Laura Lloyd
Mar 7, 2014

BEIJING — COFCO Corp., the largest grain, oil and foodstuff company in China, has signed an agreement to purchase 51% of Nidera, a global commodity trader and agribusiness company headquartered in The Netherlands, for an undisclosed sum.

The strategic partnership, which may lead to a joint venture in sugar, soybeans and wheat with Hong Kong-based Noble Group, a leading commodities trader, is viewed as putting China’s top grains importer in direct competition with international agricultural trading houses such as Archer Daniels Midland, Bunge, Cargill, Louis Dreyfus Commodities and Glencore Xstrata.

The COFCO-Nidera merger would allow the Chinese company to build its presence in South America and Central Europe, as well as other locations around the world, including possibly the United States. The chief executive officer of Nidera, Ton van der Laan, said the joint venture would increase opportunities for his company in fast-growing Asian markets.

The Financial Times said March 6 that COFCO’s five-year plan envisions investments of $10 billion in overseas mergers and acquisitions by 2015. COFCO also plans to increase its soybean crushing and corn grinding capacity to 77 million tonnes a year by 2015 from about 50 million tonnes. Sugar will be a special focus after grains, building on previous acquisitions made by COFCO in that industry.

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