SINGAPORE—Sinochem International Corp., the state-owned Chinese agricultural giant, has signed definitive agreements with natural rubber supply chain manager Halcyon Agri Corp. Ltd. to become the majority shareholder in Halcyon Agri.
If completed, the transaction would create the world's largest and most comprehensive natural rubber supply chain management firm, according to a news release from Halcyon Agri. The combined businesses would be combined under the Halcyon Agri name and continue to be listed on the Singapore Commodity Exchange, the release said.
The combined Sinochem-Halcyon Agri business would have 378,000 acres of land in Africa and Southeast Asia in its upstream segment, according to Halcyon Agri.
In the midstream processing segment, the combined business would have 35 facilities in Indonesia, Thailand, Malaysia, China and Africa, with a total annual processing capacity of 1.5 million metric tons, Halcyon Agri said. The new company's global distribution network would span China, Asia, Europe and the U.S., with annual NR and latex sales capability of more than 2 million tons, it said.
Combined revenues for the newly merged company will be more than $2.3 billion annually, according to Halcyon Agri.
Australia and New Zealand Banking Group Ltd., Singapore Branch, a wholly owned subsidiary of Sinochem, made the official mandatory conditional cash offer for Halcyon Agri's shares, according to the cash offer document posted on Halcyon Agri's website.
According to that document, Sinochem will acquire a 30.07 percent share of Halcyon Agri for 75 Singapore cents (55 U.S. cents) per share in cash.
Sinochem also will make a mandatory general offer to all shareholders at the same price, the document said. Certain shareholders of Halcyon Agri have provided undertakings ensuring that Sinochem's share of Halcyon Agri will be at least 53.98 percent upon completion of the MGO, it said.
After the MGO is completed, Halcyon Agri will make a voluntary general offer for Sinochem subsidiary GMG Global Ltd. at a rate of 0.9333 Halcyon Agri shares for each GMG share, the document said.
Finally, Halcyon Agri will acquire Sinochem's NR processing and trading businesses in China and Malaysia in exchange for 280 million Halcyon Agri shares, it said.
The proposed merger is expected to raise Halcyon Agri's profile in equity and debt capital markets, helping it to increase its market capitalization, according to the document. In turn this will help Halcyon Agri to attract more extensive research coverage and possibly more investor interest as well, it said.
Sinochem's business encompasses industrial investment, logistics, fine chemicals, agrochemicals and chemical distribution as well as natural rubber, according to a news release. It has customers in more than 100 countries and regions worldwide, the release said.
Sinochem's natural rubber business has been operating for more than 60 years and was the first entity in China to engage in NR trading, it said.
Halcyon Agri owns 14 NR processing facilities in Malaysia and Indonesia that produce the company's proprietary Heveapro-brand technically specified rubber, as well as other NR grades, the company said. It has 4,000 employees worldwide and has an aggregate NR distribution capacity of 1 million tons annually, it said.