A MAJOR Indonesian food company has acquired a substantial stake in China Minzhong Food Corporation.
Indofood Sukses Makmur, which is listed on the Jakarta Stock Exchange, subscribed for 98 million new shares of mainboard listed China Minzhong at 91.5 cents apiece last Friday.
This represents a discount of 9.9 per cent over the weighted average price of $1.0159 the day before.
The net proceeds of about $85 million will be used for the company's planned expansion of its industrialised farming operations and as general working capital.
The acquisition will give Indofood a 15 per cent stake in China Minzhong.
Indofood and its subsidiaries are a major food-based player in Indonesia, with operation ranging from the production of raw materials and their processing to consumer products.
Two of its subsidiaries are listed entities in their own right, including Singapore-listed Indofood Agri Resources.
China Minzhong executive chairman and chief executive Lin Guo Rong said he was pleased to attract the keen interest from our new shareholder.
"With Indofood's long-standing track record in the food industry and China Minzhong's experience in agriculture and food processing, there are a lot of potential synergies between our businesses such as strategic cooperation in supply chain and product distribution in the fast moving markets of China and Indonesia," he said.