COFCO on the sidelines, saddled with debt, but Bunge-Glencor merger talks continue: report

June 26, 2017 |

In China, Reuters is reporting that COFCO is now expected to sit out the current wave of global M&A amongst major agricultural firms, citing that “he state-run conglomerate is struggling to integrate businesses it bought three years ago, deals which made it a significant global agricultural trader but are now hindering its ability to swoop on rivals.” In all, the state-controlled COFCO controls interests in sectors varied from hotels to the bioeconomy, and the Reuters report referes to a company struggling with debt load. In a biofuels sideline, the report also noted “a $150 million financial hole in its Latin American operations and $200 million in unauthorised trading losses on its biofuels desk in the region.” Overall, COFCO trades over 78 million tonnes of grain, a numebr that spiked in recent years with the acquisition of the Swiss-owned Nidera and the Noble Groups’s agribusiness, which the company paid more than $3 billion to acquire.

The report also confirms that Glencore and Bunge ar ein talks about a potential combiantion, after the Bayer-Monsanto, Dow-DuPont and Syngenta-ChemChina combiantinos that are all pursuing regulatory approval around the globe.

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