ADM trades China assets for Wilmar Intl. shares
Thu Dec 14, 2006 7:04am ET
NEW YORK, Dec 14 (Reuters) - Archer Daniels Midland Co. (ADM.N: Quote, Profile , Research) said on Thursday it would trade China-based agriculture processing joint venture assets to Wilmar International Ltd. (WLIL.SI: Quote, Profile , Research) in exchange for Wilmar shares.
Singapore-based Wilmar plans to acquire the worldwide oilseed-related assets of Wilmar Holdings Pte. Ltd. and merge with the Kuok Group, making it the largest agribusiness group in Asia.
Wilmar says bids $4.3 bln for Malaysian agri assets
Thu Dec 14, 2006 7:55am ET
By Saeed Azhar
SINGAPORE, Dec 14 (Reuters) - Palm oil refiner Wilmar (WLIL.SI: Quote, Profile , Research) said it would buy Malaysian plantation and agri-business assets from The Kuok Group and others in a $4.3 billion deal, continuing Malaysia's palm oil industry shake-up.
The new merged group would have a stock market value of about $7 billion and estimated revenues of $12 billion, Singapore-listed Wilmar International said, making it Asia's leading agribusiness group with a strong presence in Southeast Asia and China.
Just last month, three Malaysian state-controlled plantation firms -- Sime Darby Bhd (SIME.KL: Quote, Profile , Research), Kumpulan Guthrie Bhd (KGBK.KL: Quote, Profile , Research), and Golden Hope Bhd (GHOP.KL: Quote, Profile , Research) -- announced an $8.6 billion merger to create the world's biggest palm oil group.
The trend towards consolidation reflects increasing interest in alternative energy sources, or biofuels, as crude oil prices remain high.
"The objective is to become a leading merchandiser and processor of palm oil. We see palm oil as becoming a major commodity," Kuok Khoon Hong, chairman and chief executive of Wilmar told a media and analysts briefing.
"Wilmar will be the undisputed leader of merchandising of palm oil in Malaysia and Indonesia," he said, and would expand to China and India.
Wilmar said it would buy Malaysia's PPB Oil Palms Bhd (PPBO.KL: Quote, Profile , Research), a listed unit of PPB Group (PEPT.KL: Quote, Profile , Research), in an all-share buyout worth $1.1 billion, and acquire other PPB Group assets bringing the total value of that part of the deal to $2.7 billion.
For the listed unit, Wilmar is offering 2.3 new shares at S$1.71 a share for every PPB Oil Palms share held.
The palm oil producer is 55.6 percent-owned by PPB Group, while the remaining shares are listed.
In addition, Wilmar will acquire the edible oils, grains and related businesses of its parent, Wilmar Holdings, including interests held by Archer Daniels Midland (ADM.N: Quote, Profile , Research), in a deal valued at $1.6 billion.
Kuok, who co-founded Wilmar, is the nephew of Robert Kuok, whose family controls PPB Group and the Kuok Group.
He said the deal would be completed by the second quarter of 2007 and would more than double Wilmar's landbank to 573,405 hectares (5,734 square kilometres, or nine times the size of Singapore).
"This company with its scale and size would certainly attract investors and funds," said a fund manager who was present at the briefing but who declined to be named.
KEY SHAREHOLDERS
The deal would still leave Wilmar Holdings with a 48.5 percent stake in Singapore-listed Wilmar International, while Malaysia's Kuok Group would have 31 percent.
Wilmar has major refining facilities in Indonesia and has been increasing its land bank to reduce its reliance on other palm oil producers.
Wilmar also plans to quadruple its biodiesel capacity from 250,000 metric tonnes a year to 1.05 million metric tonnes a year in 2007.
Palm oil firms are merging, exploiting surging crude palm oil prices and high stock valuations to buy rivals with their own shares and meet growing global demand.
Shares in Wilmar, PPB Group and PPB Oil Palms were all suspended from trading on Wednesday, pending the announcement.
Wilmar shares, which have risen 128 percent this year, fell 5.5 percent before trading was halted on Wednesday. PPB Group shares have gained 18 percent in 2006. (additional reporting by Mark Bendeich in Kuala Lumpur)
