Sinochem and Halcyon Agri join forces in natural rubber business

 Sinochem International Corporation and Halcyon Agri Corporation Limited have signed definitive agreements to bring about a combination of their natural rubber assets to create the world’s leading natural rubber supply chain manager. The businesses will be combined under Halcyon Agri, which will continue to be listed on the SGX.

The transaction would create the world's largest and most comprehensive natural rubber supply chain manager with strong capabilities across each segment of the supply chain. In the upstream segment, the combined business would have 153,000 ha of land in Africa and South East Asia. In the midstream processing segment, the combined business would have 35 processing facilities spanning Indonesia, Thailand, Malaysia, China and Africa with a total annual processing capacity of approximately 1.5 million tons

The global distribution strength of the combined business would be unparalleled, with an extensive distribution network centred around key hubs in China, Asia, Europe and the United States and annual natural rubber and latex sales capability in excess of 2 million tonnes.

The transactions are designed to deliver an efficient combination of the natural rubber assets of Sinochem International and Halcyon Agri. Sinochem International will acquire a 30.07% shareholding in Halcyon Agri for S$0.75 cents per share in cash and make a mandatory general offer (“MGO”) to all shareholders of Halcyon Agri at the same price. Certain shareholders of Halcyon Agri have also provided undertakings such that Sinochem International’s shareholding in Halcyon Agri following completion of the MGO will be no less than 53.98%.
 
Finally, Halcyon Agri will also acquire Sinochem’s natural rubber processing assets in China and Malaysia and trading businesses, for consideration of 280 million Halcyon Shares. Following completion of the transactions, Sinochem will be the majority shareholder of Halcyon Agri, which will be the holding company of the expanded group.

The transactions are subject to, among others, the approval of Halcyon Agri shareholders at an extraordinary general meeting and regulatory and competition approvals in certain jurisdictions. Final completion of the transactions is expected by the end of Q3 2016.