SINGAPORE A unit of Chinese oil and chemicals conglomerate Sinochem Group offered to buy a majority stake in Singapore's Halcyon Agri Corp in a deal that will combine their rubber assets and create the world's largest natural rubber supply chain manager.
Sinochem International Corp said late Sunday that it has offered to acquire a 30.07 percent stake in Halcyon Agri for S$0.75 a share. The all-cash deal will be worth at least S$240 million ($175 million).
Sinochem International will also make a mandatory general offer at the same price to all Halcyon shareholders.
Subsequently, Halcyon will make an offer for Singapore-based natural rubber producer GMG Global Ltd - in which Sinochem International has a 51 percent stake - at an exchange ratio of 0.9333 Halcyon share for each GMG Global share.
Halcyon Agri will also buy Sinochem's natural rubber processing assets in China and Malaysia and trading businesses, the companies said in a joint statement on Monday.
After the transactions are complete, Sinochem will become the majority shareholder of Halcyon Agri, which will be the holding company of the expanded group.
The deals are expected to be completed by the end of the third quarter of 2016.
The companies said the deal would create the world's largest natural rubber supply chain manager with combined revenue exceeding $2.3 billion.
The companies said in January that they had been in talks over the potential deal.
Trading was halted in shares of Halcyon, which has a market value of $320 million, and in GMG, valued at $345 million.
Halcyon, which requested on Monday for the trading halt to lifted, last traded at S$0.73, while GMG was at S$0.615.
($1 = 1.3721 Singapore dollars)
(Reporting by Aradhana Aravindan; Editing by Ryan Woo)
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Updated Date: Mar 29, 2016 03:30 AM