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China approves Chinatex merger with COFCO
[BEIJING] China's State Council approved a merger of textile and grains trading group Chinatex Corp with the country's largest grain processor and trader COFCO Group, the state assets supervisor said on Friday.
Chinatex will become a subsidiary of COFCO after the merger, according to the State-owned Assets Supervision and Administration Commission (SASAC). Both Chinatex and COFCO are state-owned entities.
The merger had been expected as part of China's efforts to improve the competitiveness of its sprawling and inefficient state-owned sector.
Total profits for central government SOEs declined by 3 per cent during the first half of the year, to 623.47 billion yuan (S$125.4 billion), SASAC said, according to a state media report on Thursday.
Revenue for the companies declined by 1.8 per cent to 10.8 trillion yuan for the period.
COFCO is restructuring as it integrates the grain trading business acquired from Noble Group late last year. It is eyeing further acquisitions overseas.