The firm is on a buying spree with the latest acquisition priced at US$600m.
Wilmar International could grab an opportunity as a larger player by acquiring smaller and inefficient players that are selling their assets and leaving the industry amidst depressed soft commodity prices, UOB Kay Hian said.
“Any good asset acquisition to gain new market access or better market positioning will be positive to Wilmar’s business outlook,” UOBKH added.
Wilmar is increasing its presence in India with a higher stake in Renuka Sugar and it also eyes to takeover Ruchi Soya.
The Competition Commission in India has approved the acquisition of Ruchi Soya by Adani Wilmar. The final approval for the transaction which is about US$600m is expected to come anytime soon.
“Ruchi Soya’s strong portfolio of mass-market edible-oil brands and a readymade infrastructure of manufacturing plants are the main attractions,” UOBKH noted. “The company has around 13-14 refining plants across the country, of which five are port-based.”
The transaction will almost double Adani Wilmar’s presence from existing locations.
In China, Wilmar is expected to file for an IPO by H1 2019 at the earliest, DBS Equity Research said. The firm’s China segment contributed to around 60% of the agribusiness’ pretax profits.
Wilmar’s profit ballooned 436.6% YoY to US$316.4m in Q2 2018 buoyed by solid performance from the oilseeds and grains and tropical oils segments, paired with better contributions from the group’s associates.
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