Indonesia's Indofood Sukses Makmur (Indofood) has increased its stake in Singapore-listed vegetable processor China Minzhong Food (CMFC) to more than 50%, through direct market purchases.
Earlier this week, Indofood launched a mandatory cash offer for CMFC at a price of S$1.12 per share, that valued the company at S$734m ($575m).
Prior to this offer, Indofood controlled approximately 33.49% stake in CMFC after having agreed to acquire 25.59 million shares CMFC on 2 September 2013, which represented 3.9% stake.
Indofood expects the acquisition to complement its business and benefit from strategic integration and synergies, including introduction of industrialized farming in Indonesia, supply of instant noodles seasoning pack ingredients and other raw materials, sale and distribution of China Minzhong products in the country, using Indofood network, cooperation in supply chain and product distribution in the Chinese and Indonesian markets.
The deal would also accelerate China Minzhong's growth and development by broadening its exposure to new and existing markets, the company said.
Indofood president director and CEO Anthoni Salim said that China Minzhong's integrated cultivation and processing capabilities provides a strategic fit to the company's business development.
"We could leverage on their business model, technology and expertise to strengthen our supply chain and expand our product portfolios. We believe that this strategic acquisition will be mutually beneficial to both Indofood and China Minzhong," Salim added.