BEIJING/PARIS (Reuters) - Chinese grains trader COFCO International has agreed to sell its crop seeds business to Swiss-based Syngenta AG as it overhauls its activities following a series of major overseas acquisitions.
The deal to sell Nidera Seeds, which operates in Latin America, was announced by COFCO International and Syngenta in a statement on Monday.
Financial terms were not disclosed but a Syngenta spokesman said it hoped to have regulatory approvals completed by the end of the year or early next year.
State-owned COFCO’s plan to sell the seeds business was reported by Reuters in August and is the latest step of its integration of Dutch trader Nidera.
“This agreement is an important step of our strategy to focus on our major businesses,” Johnny Chi, chief executive of COFCO International, said in a statement.
COFCO has spent more than $3 billion buying Nidera and Noble Agri in the past three years, thrusting it into the league of multinational agricultural traders.
COFCO International was officially launched in April this year to combine the overseas trading activities, but losses inherited from Nidera have raised uncertainty about its short-term prospects.
The Chinese group has embarked on an overhaul of its operations in Europe and South America.
Nidera’s seed business is concentrated in Argentina and Brazil, with a network in neighbouring countries, according to COFCO International’s website. It focuses on corn, sunflower, sorghum, soybeans and wheat.
It represents COFCO International’s entire seed activity, a spokesman said.
Selling the business to Syngenta means it will remain under Chinese ownership following ChemChina’s takeover this year of the Swiss crop chemical and seed group.
The global seeds sector has witnessed a series of multi-billion consolidation deals as companies that supply farmers are pressured by persistently low crop prices.
Syngenta has said it would pursue deals to become the third-biggest player in the seeds industry.
Reporting by Dominique Patton in BEIJING, Gus Trompiz in PARIS and Joshua Frankkin in ZURICH; Editing by Kenneth Maxwell and Louise Heavens