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China Creates Ag Trading Giant with COFCO Merger, IPO

Cofco Int'l will merge some of its domestic trading, processing assets; IPO could value company at $5B


China's largest food company plans to merge its international trading division with several domestic businesses to create a new agricultural commodity giant before embarking on an initial public offering.

According to a report at The Straits Times, COFCO Corp. has hired bankers to advise on a plan to combine COFCO International with some of its domestic trading and processing assets, according to people familiar with the talks.

After the merger, COFCO plans to sell shares in the new company, most likely in Shanghai, the people said, asking not to be named as the matter is private. The IPO could value the new company at more than US$5 billion, the people said.

The combination will create a new colossal agricultural trading company, which will compete with ADM, Bunge, Cargill and Louis Dreyfus.

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