China's biggest grains trader, Cofco, is in talks to buy Noble Group's agribusiness arm in a deal that would value the division at around US$1 billion, sources said.
Acquiring the Noble unit would help China develop a powerful agricultural trading house, something it lacks.
State-backed Cofco, which last week agreed to buy a 51 per cent stake in Dutch grain trader Nidera, was conducting due diligence on the Noble unit, the sources said.
The precise stage of the talks was not clear, they said, cautioning that a deal for the unit, which trades and processes grains, may not materialise.
Noble said it was engaged in discussions with a consortium over a potential joint venture around its agriculture business, but no binding arrangements had been entered into. It did not identify Cofco as part of the consortium.
A Cofco spokesman said he was not aware of talks with Noble.
An acquisition push by Cofco comes after a wave of consolidation in the global agribusiness sector - including deals by Japanese firms to snap up rivals - that largely passed China by.