COFCO, Chinatex Merger Gets Approval
Approval has been granted by China’s State Council for a merger between grains and textile trader, Chinatex Corp with grain giant, COFCO Group.
Both parties are state-owned entities (SOEs), and the deal has been expected as part of efforts by Beijing to streamline China’s fragmented and disorganized state-owned sector after revenues for the country’s SOEs fell by 1.8% and profits fell by 3% in the first half of 2016 to US$93.32 billion, according to the Assets Supervision and Administration Commission (SASAC).
COFCO is also undergoing reorganization as it works to integrate Noble Group’s grain business, which it acquired last year, into its operations. Under the terms of the merger, Chinatex will become a subsidiary of COFCO upon closing of the transaction.