CP Group, Itochu ink $1bn food deal

Itochu Corp, Japan’s third-largest trading company, agreed to a business tie-up with Thailand’s agriculture group Charoen Pokphand Thursday as the two companies seek to expand their food businesses.

Itochu will buy an $852 million stake in Hong Kong-based unit CP Pokphand Co and the Thai company will take $1 billion of Itochu's stock in the deal, according to separate statements from the companies. Itochu will also buy back as many as 78 million shares from the market over the next year, the Tokyo-based company said today in its filing.

CP Pokphand, which has a market value of $3 billion, produces animal feed in China and owns farms in Vietnam. Shares of CP Pokphand and its Bangkok-listed parent company, Charoen Pokphand Foods Pcl, were halted from trading today pending announcements.

The board of Charoen Pokphand Foods, Thailand's largest meat producer, met yesterday and approved a "significant" asset disposal by the company and one of its subsidiaries, it said in an exchange filing today.

Itochu fell 0.4% to 1,315 yen at the close in Tokyo today, before the announcement.

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