Cofco of China Taking Control of Nidera to Boost Food Supply

Cofco Corp., China’s largest food company, agreed to buy 51 percent of Dutch grain trader Nidera BV to expand food supplies to the world’s most populous nation.

State-owned Cofco will extend its trade network by tying up with Nidera, which has annual sales of more than $17 billion, the Chinese company said in an e-mailed statement. The closely held Dutch trader has “strong platforms” for procuring grain in Brazil, Argentina and central Europe, the company said.

The deal values Rotterdam-based Nidera at about $4 billion including debt, said a person with knowledge of the matter who asked not to be identified as the details are private. Cofco didn’t say how much it paid for the stake in the Dutch company, which trades grains, oilseeds, vegetable oils, meal and bio-energy products. HSBC Holdings Plc advised Cofco on the deal.

China is seeking to secure food supplies as rising incomes encourage people to eat a protein-rich diet, adding to pressure on land, water and farming resources. The country, the biggest buyer of soybeans, is poised to allow more agricultural imports in a shift in policy that would aid exporters from the U.S. to Ukraine, two people with knowledge of the plan said this year.

Purchasing the Nidera stake “is in line with the strategy of making Cofco a global-standard company,” the Chinese food and grain company’s Chairman Frank Ning said in the statement.

Nidera management will remain and its current shareholders won’t exit, according to the statement. The companies will seek regulatory approvals for the transaction in coming months.

“The Chinese and Asian markets are of great importance to Nidera,” Chief Executive Officer Ton van der Laan said in the statement. Charles Huijskens, a spokesman for Nidera working at HuijskensBickerton, wasn’t immediately available to comment.

— With assistance by Jason Rogers

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