Cofco Corp, the Chinese state-owned agricultural trader, trumpeted a leap forward in its drive to become a world force as it took complete control of Noble Agri, paying $750m to buy out minority partner Noble Group.
Cofco Corp, head of a consortium which bought an initial 51% of Noble Agri last year, said on Tuesday it would rename the business Cofco Agri after closing the deal to raise the stake to 100%.
The deal reflected an upbeat forecast for the Cofco Agri, once it is fully consolidated into the Cofco Corp empire.
Cofco Corp is "still bullish on the long-term performance… despite the depressed global agricultural commodity market for the time being," said the group's chairman, Frank Gaoning Ning.
Furthermore, the deal will "will greatly accelerate Cofco Corp's internationalisation and global positioning", Mr Ning said.
Matt Jansen, the former Archer Daniels Midland oilseeds boss appointed Noble Agri chief executive in May, said that the consolidation of the business's ownership in Cofco Corp "is a strong step towards our guiding vision - to be a multi-flag world class global agri-business".
Noble Agri already has operations in 29 countries, employing 9,500 staff, and had sales of $14.9bn last year.
For Noble Group, the disposal will bring cash much need to pay down debts, and bolster a balance sheet which had raised concerns among some investors, while exiting fully an agriculture sector in which it has struggled in recent years.
Indeed, the company expects to book a $546m loss on the disposal.
"Although Noble Group continues to strongly believe that the long-term strategic rationale for the Noble Agri joint venture is compelling, returns on Noble Agri have dragged Noble Group's returns lower over the past years," Noble Group said.
Yusuf Alireza, the Noble Group chief executive, said that Noble Agri "will be better developed" after being itegrated into Cofco Corp's "global positioning".
One question mark left by Tuesday's deal is what it means for Nidera, the Dutch-based ag trading group of which Cofco also bought a 51% stake last year, and which last month bought out 100% ownership of its Australian arm, formerly Pentag Nidera.
Ton van der Laan, the Nidera chief executive, said that "for the foreseeable future, Nidera will be working as a separate entity within Cofco Corp", ruling out for now a merger with Noble Agri.
"There is intensive and good co-operation between COFCO and Nidera on many important topics," Mr van del Laan added.
By Mike Verdin