April 2,2014, Hong Kong
COFCO Corporation (“COFCO”), a leading supplier of diversified products and services in the agricultural products and food industry in China, and Noble Group Limited (“Noble Group”), a market-leading global supply chain manager of agricultural and energy products, metals and minerals headquartered in Hong Kong, have entered into definitive agreements to form an agribusiness joint venture, Noble Agri Limited (“Noble Agri”).
Under the terms of the agreement, COFCO will acquire a 51% stake in Noble Agri Limited (“Noble Agri”) from Noble Group in an all cash transaction to establish a 51%/49% joint venture. The transaction values Noble Agri equity at 1.15x 2014 book value. As at 31 December 2013, Noble Agri had shareholders’ equity of US$2.8 billion and net debt of US$2.5 billion.
Noble Agri will become the principal international origination platform for COFCO, with its upstream origination and trading operations linked to the downstream processing and distribution capabilities of COFCO and its affiliates in China to create a fully integrated value chain, consistent with COFCO’s strategy.
A consortium of international investors led by HOPU Investments (“HOPU”) will join COFCO as minority co-investors in this acquisition. COFCO will hold two-thirds of the investment vehicle with the balance held by the HOPU-led consortium.Mr. Frank Ning, Chairman of COFCO will assume the role of Chairman of Noble Agri and Mr. Richard Elman, Founder and Chairman of Noble Group, will take on the role of Deputy Chairman. Mr. Yusuf Alireza, CEO of Noble Group, will be the interim CEO working closely with the current Noble Agri leadership team.
Frank Ning, Chairman of COFCO, said, “Noble Agri’s supply chain management system and origination capabilities complement COFCO’s logistics, processing, and distribution network in China. Incremental trade volumes from COFCO as a strategic investor will create significant synergy and value.”
Richard Elman, Chairman of Noble Group, commented, “We feel confident about our partnership with COFCO and believe that with the financial and business support of our new partners we will accelerate the execution of our strategy.”
Yusuf Alireza, CEO of Noble Group, commented “We are committed to the continued growth and success of Noble Agri Ltd and the new shareholders of Noble Agri share the vision and passion to build a leading global agricultural firm.”
In the next several months, COFCO and Noble Group will work closely to obtain the relevant regulatory and shareholders approvals required to complete the transaction.
Founded in 1949, COFCO has developed from a grains and oilseeds trading company into China’s leading service provider of agricultural products and diversified food services. COFCO is committed to creating an agricultural and food company with an integrated value chain that connects farms to households and creates a full-service urban system, and to utilizing sustainable natural resources to provide nutritious, premium-quality products.
From trading and processing of grains and oilseeds, COFCO’s value chain has now extended to origination and husbandry, logistics and storage, raw materials processing, biofuels, branded food production and sales, hotels and real estate, financial services, among others. COFCO is committed to building its core competencies in each stage of the value chain and maximizing value for our stakeholders, customers and employees.
As a widely recognized global company, COFCO has been awarded as one of the “Fortune 500” companies for 20 consecutive years, the only Chinese agri-food enterprise on the list. COFCO’s revenues in 2012 were US$34Bn.
About Noble Agri
Established in 1998, Noble Agri is the agriculture platform of Noble Group and mainly engages in agricultural trading and processing business which it originates from low-cost producing regions such as South America, South Africa, East Europe, India, and Australia, to supply regions with high demand, such as Asia and Middle East.
Noble Agri and conducts business via 3 operating segments, namely (i) Grains and Oilseeds (“G&O”) which originates, processes, and distributes grains and oilseeds such as corn, wheat, soybean, and vegetable oil, (ii) Softs which engages in the trading of soft commodities such as cocoa, cotton, coffee and sugar, and (iii) Sugar which is involved in the production of both raw and processed sugar and ethanol, as well as in the operations of sugar mills and the cultivation of sugar cane. Noble Agri owns and operates logistics and processing assets in strategic locations within key global grain trade flows such as Timbues in Argentina (ports and crushing facilities).
About Noble Group
Noble Group (SGX: N21) manages a portfolio of global supply chains covering a range of agricultural and energy products, as well as metals, minerals and ores. Operating from over 140 locations and employing more than 70 nationalities, Noble facilitates the marketing, processing, financing and transportation of essential raw materials. Sourcing bulk commodities from low cost regions such as South America, South Africa, Australia and Indonesia, the Group supplies high growth demand markets, particularly in Asia and the Middle East. In order to ensure the integrity of its supply chains, the Group has a portfolio of interests in strategic logistics and processing assets which form an integral part of facilitating its key trade flows. We are ranked number 76 in the 2013 Fortune Global 500.
About HOPU Investments
HOPU Investments is a private equity investment firm with offices in Beijing, Hong Kong and Singapore and strategic partners in New York and London. The company has developed strong relationship with sovereign wealth funds and institutional investors from APAC, Americas, Europe and Middle East. HOPU's debut fund successfully raised US$2.5 billion in 2008 and most recently had initial closing at US$1.1 billion for its HOPU USD Master Fund II, L.P., which focuses in consumer, natural resources, and financial services sectors.