China’s largest food trader is on the hunt for international merger partners and acquisition targets, amid a massive surplus in domestic grain stocks. Yu Xubo, president of China National Cereals, Oils and Foodstuffs Corp, commonly referred to as COFCO, said the company will concentrate on firms that can help solve food shortages at home, and allow the company to develop a global supply chain…Full Article: China Daily June 2016

Key Point

  • COFCO will explore acquisition opportunities of oilseed (e.g. soybean, and rapeseed/canola) and animal feed companies in the Americas and Europe.

ChinaAg Comments

  • In May 2016, two new COFCO funded (US$75 million) shipping berths opened in the Mykolaiv Commercial Sea Port, Mykolaiv Oblast, Ukraine. Located along the Black Sea, the COFCO-backed berths at the port will have an annual grain (e.g. corn) transit capacity of 2.5 million MTs, along with 143,000 MTs of storage facilities.
  • In March 2016, COFCO Property announced it would raise CNY 5 Billion via the private placement of shares. COFCO Property is traded on the Shenzhen Stock Exchange (000031) and is a subsidiary of the state-owned China National Cereals, Oils and Foodstuffs (COFCO) Corporation. According to a representative of Shanxi Securities, COFCO is looking to increase profits by investing in real estate in Beijing, Shenzhen, Guangdong, Yantai, Hangzhou, and Nanjing.
  • In January 2016, the head of SinoGrain (Zhao Shuanglian) became the new chairman of COFCO Corp as Ning Gaoning was tapped to lead Sinochem Group.
  • In December 2015, COFCO announced it would buy out the remaining 49% of Noble Group’s Noble Agri division.
  • COFCO’s February 2014 investment in Nidera and April 2014 investment in Noble Group was 60% financed by COFCO and 40% by outside investors such as: Hopu Investment Management Co. (Chinese private-equity firm), Temasek Holdings (Singapore state-owned investment firm), Standard Chartered Private Equity and the World Bank’s International Finance Corp.
  • In April 2014, COFCO acquired a 51% stake (estimated at US$1.5 billion) in Noble Group’s Agribusiness Division (trades in grains, oilseeds, sugar, cocoa, cotton, and coffee).
  • In February 2014, COFCO purchased a 51% stake (estimated at US$1.2 billion) in Nidera, a Dutch grain trading company.
  • In March 2013, COFCO announced that it received $4.82 billion in loans from the China Development Bank in order to stabilize food prices and improve productivity.
  • In November 2012, COFCO announced that for the next four years it had approximately US$10 billion to fund overseas mergers and acquisitions.

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