Cofco Said Set to Buy Control of Noble Unit at $3 Billion Value

Apr 01, 2014 12:44 pm ET

April 2 (Bloomberg) -- Cofco Corp., China’s largest food company, plans to acquire a majority stake in Noble Group Ltd.’s agriculture unit in a deal that values the business for about $3 billion, two people with knowledge of the matter said.

Hopu Investment Management Co., a private-equity fund, has joined Cofco in the purchase, the people said, asking not to be identified discussing private information. The group plans to pay about $1.6 billion for a 51 percent stake, one person said.

Spokesmen for Cofco, Hopu and Noble couldn’t be reached outside of normal business hours. Noble, Asia’s biggest commodity trader by sales, said last month that it is in talks to form a joint-venture around the unit.

Noble’s agriculture unit stores, processes and trades commodities from sugar to grains, oilseeds and cotton. The deal comes after state-owned Cofco agreed in February to buy 51 percent of Dutch grain trader Nidera BV, which has annual sales of more than $17 billion, as it seeks to expand food supplies for the world’s most populous nation.

Agriculture is Noble’s smallest unit by revenue, accounting for about 16 percent of sales in 2013, according to data compiled by Bloomberg.

Hopu, which was set up by Fang Fenglei, the Chairman of Goldman Sachs Group Inc.’s Chinese securities venture, is seeking to boost its second local fund to $1.6 billion after already raising $1.2 billion, a person with knowledge of the matter said last month.