Japanese trading house Mitsubishi Corp will buy at least a 10 per cent stake in agri-trader Olam International from Singapore investment company Temasek Holdings - a deal worth at least US$500 million (S$702 million), people familiar with the matter said.
One of the sources said Mitsubishi had done extensive due diligence and had also looked at other strategic investments before choosing Olam. The people declined to be identified as discussions were private. Earlier, Olam shares surged by the most in six years before the commodity company called for a trading halt.
The company, which began with cashew operations in Nigeria in 1989, has grown into one of the world's top re-sellers of nuts while branching out into coffee, cocoa, rice and cotton.
It now grows, processes and trades 44 commodities in 65 countries, and said this month it expects to close its biggest deal to date, a US$1.3 billion acquisition of Archer-Daniels-Midland's cocoa unit by the end of the year.
Olam shares rose 22.5 cents or 13.4 per cent to $1.91 before the halt, giving it a market value of $4.7 billion. The surge makes it the biggest jump for the group since April 2009.
The buying spilled over to Noble Group, which soared 6.5 cents or 14.4 per cent to 51.5 Singapore cents. Noble was the most actively traded stock yesterday, with turnover of 137.4 million units.
Temasek took a controlling stake in Olam in March last year to help it fend off attacks from US short-seller Muddy Waters. The US company led by Mr Carson Block in 2012 questioned the state of Olam's finances and operations, causing the stock to plunge.
Little known to retail consumers, Olam supplies materials to companies including PepsiCo.
One in eight chocolate bars eaten globally is made from beans handled by Olam. It makes enough cotton to provide the world's population with three pairs of socks each year, and the quantity of rice it handles annually could feed all of Africa for a week.