4 April 2014
- Terence Foo, Virginia Lee, Raymond Tong, Liu Fang, Satbir Walia, Richard Blewett, Yong Bai, Mark Grime
- Hong Kong, Beijing
Clifford Chance advises COFCO on acquisition of 51% of Noble Agri and the establishment of agribusiness joint venture
Leading international law firm Clifford Chance has advised COFCO Corporation on its acquisition of 51% of Noble Agri Limited from Noble Group, to establish a 51%/49% joint venture. Noble Agri is the agricultural platform of Noble Group and mainly engages in agricultural trading and processing business, which originates agricultural commodities from low-cost producing regions to supply regions with high demand. The transaction values Noble Agri at 1.15x 2014 book value and the purchaser will make an initial payment of US$1.5 billion at closing.
Noble Agri will become the principal international origination platform for COFCO to source agricultural commodities, linking Noble’s upstream origination and trading operations with COFCO’s downstream processing and distribution capabilities in China to create a fully integrated value chain.
COFCO will be joined by a consortium of international investors led by HOPU Investments as minority co-investors in this acquisition. COFCO will hold two-thirds of the investment vehicle with the remaining one-third held by the HOPU-led consortium.
This transaction follows COFCO's announcement just over a month ago of its acquisition of a 51% stake in Nidera, a global commodity trader and agribusiness company headquartered in the Netherlands, on which Clifford Chance also advised. COFCO will invest approximately US$2.8 billion for both acquisitions.
"I'm delighted to be working with COFCO again on another strategic acquisition," said Beijing Corporate partner Terence Foo, who co-led both the Noble Agri and the Nidera transactions. "The acquisition of the two leading agribusinesses provides a strong international platform for COFCO. China is now the largest importer of agricultural commodities in the world, and this transaction will help build up a stable global grains corridor between the largest agricultural commodities origination regions and high demand regions such as China."
Asia Pacific Head of M&A, Roger Denny who co-led the Noble Agri deal adds, "After a lacklustre M&A market last year, we are seeing a surge in big-ticket deals, led by cash-rich Asian companies and investment houses. The global economy has stabilised and deals are now being consummated."
The Clifford Chance team was led by Corporate partners Terence Foo and Roger Denny and assisted by consultant Fang Liu, senior associates Isaac Stewart and Satbir Walia and associates Adam Wang and Grace Wu. Partners Virginia Lee and Raymond Tong provided support on Hong Kong and Singapore listed companies advice, David Griston on commodities sector expertise, Jonathan Elman and senior associate Rebecca Hill on tax. A separate team led by China antitrust head Richard Blewett supported by senior associates Angie Ng and Bai Yong and associate Mark Grime provided antitrust advice.
COFCO, a Fortune 500 company, is the largest grain, oil and foodstuff company in China with a business portfolio covering agriculture commodity trading and processing, branded consumer foods and beverages, packaging materials and products, hotels & real estate, finance and others.
Noble Group manages a portfolio of global supply chains covering a range of agricultural and energy products and commodities with operations in over 140 locations.