COFCO to fully acquire Noble Agri

by World Grain Staff
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CHAO YANG DISTRICT, BEIJING, CHINA — COFCO Corporation announced on Dec. 22 that it had reached an agreement with Noble Group under which COFCO Corporation’s subsidiary, COFCO International Limited (CIL), will acquire Noble Agri’s 49% stake held by Noble Group for $750 million. Upon the completion of the transaction, CIL will hold a 100% stake in Noble Agri, which will be renamed COFCO Agri.

Noble has been under pressure to raise cash to avoid losing its investment grade rating and being dropped to junk bond status. Noble Group’s Corporate & Others segment, which includes Noble Agri Limited, reported on Nov. 13 a loss of $60.7 million compared to a $193.2 million profit in the same period of last year. Noble Agri has continued to operate at a loss in the nine months ended Sept. 30, as it has continued to be impacted by lower sugar prices. The latest quarter also saw rain impacting the ramp up of the seasonal harvest and lowering sugar yields.

In 2014, a consortium led by COFCO Corporation acquired 51% stake in Noble Agri. By the end of the year, Noble Agri had sales of $14.9 billion, and delivered 46 million tonnes of products globally, with 45 asset locations and 9,500 employees in 29 countries, COFCO said.
 
“The acquisition will greatly accelerate COFCO’s internationalization and global positioning,” said Frank Gaoning Ning, chairman of COFCO Corporation. “COFCO is fully confident in the new management team and still bullish on the long-term performance upon the integration of Noble Agri into COFCO Corporation despite the depressed global agricultural commodity market for the time being.”

COFCO Corporation has been actively engaged in resource consolidation to optimize asset allocation and boost its profitability, COFCO said. Noble Agri will become COFCO Corporation’s 100% fully owned overseas purchase platform and contribute to further optimization of COFCO Corporation’s global value chain configuration by linking its upstream origination and trading operations with the downstream processing and distribution capabilities of COFCO Corporation and its affiliates.

“I am pleased to see that COFCO Corporation and Noble Group have reached another agreement,” Yusuf Alireza, chief executive officer (CEO) of Noble Group. “We believe that these assets will be better developed after being seamlessly integrated into COFCO’s global positioning.”

In May 2015, Jansen, who had abundant experience in agriculture industry, was appointed as CEO of Noble Agri. Noble Agri engages in agricultural trading and processing businesses, which it originates from surplus producing regions such as South America, North America, South Africa, East Europe and Australia, to supply regions with high demand such as China, Asia and the Middle East.

“The consolidation of our ownership is a strong step toward our guiding vision: to be a multi-flag world class global agri-business,” Matt Jansen, CEO of Noble Agri said, “The base we build on — our global reach, our operations in 29 countries — positions us to reach that goal.”

In February of 2014, a consortium led by COFCO Corporation acquired 51% stake of Nidera. Nidera is a major international agribusiness and trading company with an annual turnover in excess of $17 billion. Currently Nidera has domestic and international operations in 18 major export and import countries and distributes its products to more than 60 countries in the world.

"COFCO Corporation is our majority shareholder,” Ton van der Laan, CEO of Nidera said. “There is intensive and good cooperation between COFCO and Nidera on many important topics. For the foreseeable future, Nidera will be working as a separate entity within COFCO Corporation and have full focus on serving its customers in the best possible way.”

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