Chinese giant Sinochem International is to merge with Singapore’s Halcyon Agri, creating the world’s largest and most comprehensive natural rubber supply chain management company.

The combined firm would have annual revenues of more than $2.3 billion. Its natural rubber and latex sales capability would be more than 2 million t/y with a distribution network spanning China, Asia, Europe and the US.

Total processing capacity would be 1.5 million t/y across 35 facilities in Indonesia, Thailand, Malaysia, China and Africa.

If completed, the newly merged company would operate under the Halcyon Agri name and continue to be listed on the Singapore Commodity Exchange.

Sinochem is offering to pay 75 Singapore cents ($0.55) per share in cash to acquire just over 30% of Halcyon Agri. It will also make a mandatory general offer (MGO) to all shareholders at the same price. Some Halcyon Agri shareholders have agreed to ensure that Sinochem’s stake would be at least 53.98% upon completion of the MGO.

Once the MGO is completed, Halcyon Agri will make a voluntary general offer for Sinochem subsidiary, GMG Global, at a rate of 0.9333 Halcyon Agri shares for each GMG share.

Finally, Halcyon Agri will acquire Sinochem’s natural rubber processing and trading businesses in China and Malaysia in exchange for 280 million Halcyon Agri shares.

In its offer document, Sinochem said the proposed merger was expected to raise Halcyon Agri’s profile in equity and debt capital markets, helping it to increase its market capitalization, which in turn would assist in attracting more extensive research coverage and investor interest.

Halcyon Agri owns 14 processing facilities in Malaysia and Indonesia that produce its proprietary Heveapro brand of technically specified rubber, as well as other grades.