[Abstract] Foreign media claim that China and other Asian countries seeking to protect their growing food needs in society are nothing new. However, China is no longer just wanting to be a buyer, but has already purchased the Dutch Nydra Group, a global agricultural product and commodity trading group, which is sold to more than 60 countries and regions in the world.
According to the Spanish "National News" report on March 2, China's largest food and grain company, COFCO, recently signed an agreement with the Nydra Group to acquire a 51% stake in the main international trader of agricultural products with annual sales of more than US$17 billion. The transaction will help COFCO-Nydera rank among the global food trade giants.
According to the report, since the beginning of the 21st century, the continued growth of China’s economy, the development of industry, and the expansion of the middle class have driven demand for raw materials, which has led to rising international raw material prices. The goal of COFCO's acquisition is to ensure China’s food security.
In addition to having a global trading network, the Nydra Group also has a solid procurement platform in Argentina, Brazil and Central Europe, which can help COFCO enhance its influence in the international food market.
COFCO is a leading provider of diversified products and services in the agricultural and food sectors in China. In recent years, it has acquired a number of Australian sugar companies, launched rice trading with Japan, and acquired French and Chilean wineries.
Spain’s “Abbeid News” reported on March 2 that “China is buying the world” and reported that China’s state-owned Dongfeng Motor Corporation announced in February that it will formally become one of the major shareholders of the French company PSA Peugeot Citroen. This is China. A new landmark event for large companies to go abroad. The process of "going out" of Chinese enterprises began more than 10 years ago and has never stopped. It has kept pace with China's economic growth.
2004At the end of 2004, Lenovo, which was still unknown at the time, unexpectedly acquired the global personal computer business of the American benchmarking company International Business Machines Corporation (IBM). This move not only allowed Lenovo to gain extensive international recognition and advanced technology, but also set an example for other Chinese companies. In January 2014, Lenovo acquired Motorola’s mobile business from Valley singer for US$2.9 billion. This is one of the largest mergers and acquisitions by Chinese companies so far, but the amount of M&A is still far lower than that of Shuanghui’s acquisition in September 2013. Smithfield Foods, a well-known meat processing company in the United States, had US$7.1 billion.
Ding Yuan, a professor at the China Europe International Business School, pointed out that unlike developed countries that seek out new markets for expansion, the goal of globalization for Chinese companies is to obtain better resources. For example, Shuanghui's acquisition of Smithfield is to obtain high quality meat raw materials and to deal with serious domestic food safety issues. Dongfeng shares Peugeot Citroën for better technical and management experience.
According to foreign reports, COFCO, a state-owned food giant seeking to enter the global agricultural market, said on February 28 that the company has acquired more than half of the stocks of the Dutch-based commodities trader Nidra Group. The alleged purchase price is US$1.2 billion.
AFP reported on February 28th that Chinese companies are undertaking a series of major overseas investments to meet the rising demand for food and energy in the world’s second-largest economy. COFCO's acquisition of 51% of the Nidra Group is one of the latest measures.
According to Dow Jones Newswires, the deal will allow China to obtain greater pricing power in the global food market and better access to major grain-producing areas such as Latin America and Russia.
The report said that the COFCO and Nidra Group's transaction is still waiting for management's approval. The financial terms of the transaction were not disclosed. According to press releases released to the media, the Nyder Group’s annual turnover exceeds $17 billion.
Chairman of COFCO Ning Gaoning stated at the press conference that COFCO's stake in the Nidra Group is in line with COFCO's strategic goal of “building an internationally-standard, full-industry-chain, grain and oil food company” and is an important part of COFCO's global presence step.
