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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.

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COFCO is restructuring as it integrates the grain trading business acquired from Noble Group late last year. It is eyeing further acquisitions overseas.


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