A worker checks bottled edible oil at a COFCO Corp plant in Jiujiang, Jiangxi province. [Photo/China Daily]

COFCO Corp will pay an initial $1.5 billion to buy a 51 percent stake in Noble Group Ltd's agribusiness, its second acquisition in less than two months as China's largest grain trader seeks to strengthen its position in global markets.

The two companies plan to form a joint venture, in which Noble will retain a 49 percent stake, that will link COFCO's grain processing and distribution business with Noble Agri's grain origination and trading business, Noble said on Wednesday.

The move follows COFCO's purchase of a 51 percent stake in Dutch peer Nidera in late February to gain direct access to South American grain and oilseed supplies in a deal that valued Nidera at $4 billion including debt.

It also comes after a wave of consolidation in the world agribusiness sector has shrunk the number of potential acquisitions for COFCO to bulk up enough to compete globally with larger rivals ADM, Bunge Ltd, Cargill Inc and Louis Dreyfus Corp, known as the ABCDs.

Noble shares jumped as much as 5 percent in early trading in Singapore, outpacing a 0.3 percent gain in the benchmark Straits Times Index. The stock is up 11.7 percent so far in 2014, compared with a 1.3 percent rise in the index.

Reuters reported in early March that the deal, which will help China develop a powerful agricultural trading house, was under discussion.

"Noble Agri's supply chain management system and origination capabilities complement COFCO's logistics, processing, and distribution network in China," COFCO chairman Frank Ning said in a statement.

A consortium led by China-focused private equity firm Hopu will join COFCO as minority investors in the acquisition and will hold a third of the investment vehicle that is making the purchase.

Noble's agricultural division generated $15.5 billion revenue last fiscal year, accounting for about 16 percent of the company's total.

COFCO and Noble still need to obtain regulatory and shareholder approval for the deal and the final price will be adjusted so that when completed the payment will be equivalent to 1.15 times 51 percent of the audited book value of Noble Agri for the 2014 financial year.

COFCO eyes deals for sugar, wine overseas	COFCO buys 51% of Dutch grain trader