March 3, 2014

China's COFCO acquires majority stake in Dutch grain trader Nidera

  
 

State-owned grain trader, China National Cereals, Oils and Foodstuffs Corporation (COFCO), has acquired a 51% stake in Dutch trader Nidera on February 28th, giving China access to South American soybean, corn, wheat and biofuel seeds.

COFCO is China's largest grain trader and the largest shareholder of China Mengiu Dairy, the country's largest milk producer. The acquisition of Nidera is the first of its kind by a Chinese company in Argentina, according to La Nacion, the leading national daily in Argentina.

The transaction will provide Nidera with great potential for growth in the Chinese market and also strengthen COFCO's position as a key player in the global agricultural industry through access to Nidera's global origination and trading network and its fast growing seed business.

Patrick Yu, President of COFCO, said, "We are delighted to reach a win-win agreement with Nidera. Nidera has a strong origination platform in Brazil, Argentina and Central Europe as well as a global trading network, which can further extend COFCO's global presence and create new opportunities. COFCO is fully committed to supporting Nidera's future development through COFCO's competitive edge in trading, processing, branding and distribution."

Nidera trades more than 33 million tonnes in grains annually, with an annual turnover in excess of US$17 billion. Established in 1920 in the Dutch city of Rotterdam, Nidera has been operating in Argentina as a grain trader since 1929, where it currently is the largest seller of seeds. 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.

Ton van der Laan, CEO of Nidera, said, "This deal will generate great growth opportunities. The Chinese and Asian markets are of great importance to Nidera. We were looking for a strong partner to jointly invest in future growth and a strategic partnership with COFCO is an ideal choice for Nidera and will benefit both sides."

"Investing in Nidera is in line with COFCO's strategy to become a global player in the agricultural industry with a fully integrated value chain and represents a significant step towards COFCO's global expansion." Frank Ning, Chairman of COFCO, said.

The transaction is subject to regulatory approvals. According to the agreement, the existing shareholders of Nidera will all remain as shareholders of the company and the current leadership and management of Nidera will stay to secure a smooth integration and successful partnership.