October 30, 2014

COFCO plans IPO after buying Nidera shares

After buying over 51% of the shares of agribusiness company Nidera in October this year, COFCO Corp now plans to have an initial public offering (IPO) that will cover the recent acquisition.

The IPO, which also includes Hong Kong-based Noble Group, is COFCO's move to compete with top agribusinesses such as Cargill, Archer Daniels Midland Co., Bunge and Louis Dreyfus.

As part of an effort to achieve the offering's objective, the Chinese grain trading company will consolidate its assets into an international joint venture. According to Frank Ning, COFCO's chief executive, the joint venture would be a vertically integrated agribusiness, able to supply seeds to farmers as well as buy, store and ship grains.

Ning added that the listing may take three years to conclude. In the meantime, COFCO will not be making any more acquisitions in the short term.

The aim of COFCO's recent acquisitions is to tap into the huge grain production areas which cover regions in South America, the Black Sea region and Asia, said the company.  

Noble's operations, for instance, include soy crushers in Argentina and grain silos in Ukraine.

COFCO is China's largest grain trader and is expected to have an aggregated revenue of US$63.3 billion this year.