Mitsubishi Corp, betting on growing demand for food in Asia, agreed to buy a 20 per cent stake in Olam International Ltd, the commodity trader controlled by Singapore’s state investment company, in two deals worth S$1.53 billion.
Olam said Thursday in a statement that it will issue 332.7 million new shares for S$915 million to Mitsubishi, one of Japan’s biggest trading houses. The Tokyo-based company is also acquiring an 8 per cent stake in the agriculture firm for S$615 million from Kewalram Chanrai Group, an Olam spokesperson said.
The investment by Mitsubishi is a sign of confidence in a company that last year was fending off an attack from US short-seller Muddy Waters LLC and questions about its finances and operations. The Japanese trader will become the second- largest shareholder in Olam after the deals close with Singapore’s Temasek Holdings controlling 51 per cent.