China’s biggest grain trader, COFCO Corp. has bought 51% of the Dutch grain trading firm Nidera in a deal that would value Nidera at $4 billion. The deal would be China’s first overseas purchase of a trading firm and would give the country direct access to South American grain and oilseed supplies further enhancing future food security for the country. The deal also seems to point to China’s goal of creating a global trading company akin to Marubeni, or the four major ABCD companies of Archer Daniels Midland, Bunge, Cargill or Louis Dreyfus. State-owned COFCO is the largest shareholder in China’s major dairy business, Mengniu, and has diversified its downstream businesses to include milling, soybean crushing and pig breeding, and has created an online platform from which to sell branded foods such as chocolate and edible oils to Chinese consumers. Nidera has grain purchasing capabilities in Brazil, Argentina, and Central Europe and a global trading network through which Nidera’s sales exceed 33 million tons of grains, oilseeds, vegetable oils, oilseed meals, agricultural inputs, bio energy products, and forward freight engagements with annual sales of $17 billion.
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