Halcyon Agri Corporation Limited said it will acquire Shanghai-listed Sinochem International's natural rubber business, creating the world's largest natural rubber supplier.
Under the deal, Halcyon Agri will buy Sinochem's natural rubber processing business in China and Malaysia. The deal will also see the acquisition of majority stake in Singapore-listed GMG Global Ltd trading business.
The acquisition, which will combine the businesses under Halcyon Agri entity, will have to be approved by Halcyon Agri shareholders.
Sinochem will take a 30.07 percent stake in Halcyon Agri for S$0.75 per share in cash, making it the majority shareholder of Halcyon Agri. There is also a mandatory general offer (MGO) to all shareholders of Halcyon Agri at the same price.
"Certain shareholders of Halcyon Agri have also provided undertakings such that Sinochem's shareholding in Halcyon Agri following completion of the MGO will be no less than 53.98 per cent," the companies said in an announcement.
The deal will create world's largest and most comprehensive natural rubber supply chain manager with 153,000 hectares of land in Africa and South-east Asia in the upstream segment, and 35 processing facilities spanning Indonesia, Thailand, Malaysia, China and Africa with a total annual processing capacity of about 1.5 million tonnes in the midstream processing segment.
"The global distribution strength of the combined business would be unparalleled, with an extensive distribution network centred around key hubs in China, Asia, Europe and the United States and annual," the companies said.