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Wilmar to buy CSR's sugar division for $1.5b

2010-07-05 13:55

Wilmar International Ltd, the world's largest palm oil trader, agreed to buy CSR Ltd's sugar unit for A$1.75 billion ($1.5 billion), beating China's Bright Food Group Co's bid for Australia's biggest refiner. [Bright plans sweet offer to Aussie CSR]

The offer includes A$1.35 billion in cash and A$403 million in assumed net debt, Singapore-based Wilmar said today in a statement. Sydney-based CSR is the world's second-largest exporter of raw sugar and Australia's No 1 producer of sugar- based ethanol and renewable energy generator from biomass.

Buying Sucrogen will give Wilmar mills that produce 45 percent of Australia's raw sugar and account for about 4 percent of global trade. Wilmar's Chief Executive Officer Kuok Khoon Hong, said the purchase will help his company's plans to expand sales in Indonesia and other Asian nations.

"They've been talking about growing their own plantations in Indonesia" to take advantage of rising demand, Carey Wong, an analyst at OCBC Investment Research, said from Singapore. "This deal gives them a foot in the door a lot faster."

Bright Food Group, Shanghai's biggest food company, raised its initial conditional offer for CSR's sugar unit to A$1.75 billion in April. It intends to trim the bid to between A$1.65 billion and A$1.7 billion, the Australian Financial Review said today, citing unidentified people close to the deal.

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