As China’s demand for iron ore and coal has slowed, Japanese companies are shifting their investments to expand into food businesses. Following this trend, Mitsubishi Corp. has bid US$1.4 billion for Norwegian fish farming company, Cermaq – a 14% premium above the company’s closing price on Friday September 19th. The deal follows closely upon Mitsubishi forging a deal in June of this year to buy a stake in Olam International Ltd. that would double its grain handling capacity in Australia. Cermaq’s shareholders, which include the Norwegian government, declined an offer from Marine Harvest for the company last year that would have netted each shareholder 40% more including dividend. Other Japanese companies that have expanded into food such as Marubeni Corp. which is the biggest supplier of soybeans to China, and Itochu Corp. which bought Dole Foods Company’s canned fruit and Asian grocery units for $1.3 billion last, year saw profits increase significantly in the three months to June while Mitsubishi saw profits fall by 17% in the last quarter. As part of its new direction, Mitsubishi has announced plans to double its profits from non-metals and energy businesses by 2020.
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