Archer Daniels Midland has, in a move unusual for a crop processor and transporter, invested $100m in a Chinese bank, following in the footsteps of the likes of Merrill Lynch, Royal Bank of Scotland and HSBC.

US agribusiness giant said it had made a "strategic" investment in Agricultural Bank of China (ABC), and signed an agreement with the bank, China's third-ranked lender "to advance agricultural development and identify strategic growth opportunities" in the country.

The deal was part of a move into China which will also see ADM, which already runs animal feed businesses in the country, open an office in Beijing to tap "significant growth opportunities".

Unusual investment

Chinese operations have already been set up by many peers, including Singapore-listed oilseeds processor Wilmar International, in which ADM has a 16.1% stake, according to the US group's annual report.

However, Archer Daniels is unusual in buying a stake in a bank, a strategy popular among western lenders, such as Bank of America, Citigroup and UBS, especially before the credit crunch, when their balance sheets were stronger.

Many investors, such as Goldman Sachs and insurer Allianz, have since reduced stakes in Chinese lenders, while Royal Bank of Scotland last year sold all its $2.4bn stake in Bank of China to rebuild its depleted capital.

Other investors in ABC - which is undertaking a potentially record-breaking stockmarket flotation in Hong Kong and Shanghai - include Standard Chartered, the emerging markets-focused bank, Qatar's sovereign wealth fund and Li Ka-shing, the tycoon behind the Hong Kong-based Hutchison empire.

'Important vantage point'

Patricia Woertz, the ACM chairman and chief executive, said that the tie-up with ABC "offers two leading supporters of agricultural growth the ability to benefit from the insight and experience of one another".

"It provides an important vantage point to identify and act on emerging opportunities," she added.

Zhang Yun, the ABC vice chairman said that while the bank was based in a different country to ADM, and in a different industry, "we share the same agriculture-related background, and both are committed to delivering the highest-standard agricultural products and services

"This solid ground provides a unique opportunity for our co-operation."

ABC, China's third largest lender, said it is "committed to serving agro-related sectors and dedicated to providing first class financial services to both urban and rural clients".

Archer Daniels shares stood 6 cents lower at $25.76 in New York.