Why Noble's agri stake sale with Cofco is a win-win deal

Noble to gain more access to Chinese consumers.

According to a report by CIMB, in a highly-anticipated move amid the recent wave of global consolidation in the
agribusiness, Noble has entered into a sale agreement with Cofco, China’s largest grain trader, to dispose of 51% of its agribusiness (Noble Agri) for an interim payment of US$1.5bn.

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Noble Agri will form Cofco's base for sourcing food materials internationally. Recall that Cofco recently acquired a 51% stake in Dutch trader, Nidera, for US$1bn, which gives it access to its strong network for procuring grains in Brazil, Argentina and Central Europe.

Cofco will now be able to combine that with Noble's upstream assets and origination capabilities. Noble Agri owns sugar mills in Brazil, grain elevators in Argentina and oilseed-crushing plants in China, Ukraine, South Africa and South America. For Noble, the deal will give it access to Chinese consumers, with the disposal also in line with its goal of going asset-light.