China's COFCO plans IPO for PE-backed businesses

The move is part of COFCO's broader ambition to establish itself as a global player in the production and distribution of agricultural commodities. The state-owned enterprise is already China's largest grain trader and the country is keen to secure food supplies to meet rising domestic demand.

The purchase of majority stakes in Noble Agri in April and Nidera in February have already transformed COFCO. The company's post-acquisition revenues will be $63.3 billion, while its annual processing and storage capacity will rise to 84 million metric tons and 15 million tons, respectively.

Frank Ning, COFCO's CEO, said the objective was to create a vertically-integrated agricultural company. The listed entity - which is unlikely to public within three years - would include production capacity in South America and the Black Sea, processing, logistics and trading, and seed technologies, Bloomberg reported. No more large acquisitions are expected in the short term.

COFCO agreed to pay an initial $1.5 billion for a 51% stake in Noble Agri, with Noble Group retaining the rest. A consortium led by Hopu took a minority position in the agribusiness joint venture. Noble Agri is involved in grain and oilseed origination, processing and distribution, soft commodities trading, and the production of sugar and ethanol.

Hopu also participated in the acquisition of a 51% interest in Nidera, an international agribusiness and trading company with an annual turnover in excess of $17 billion. Other members of the PE consortium included Temasek Holdings, International Finance Corporation (IFC) and Standard Chartered Private Equity.

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• Topics
• Exits
• Industrials
• Greater China
• China
• Agriculture
• IPO
• Commodities
• Logistics
• Exit
• Hopu Investment Management
• Temasek Holdings
• Standard Chartered Private Equity
• IFC