KUALA LUMPUR (Oct 24): Timber products manufacturer Ta Ann Holdings Bhd plans to acquire oil palm developer Agrogreen Ventures Sdn Bhd (AVSB) for RM211.1 million to expand its plantation land bank in Sarawak.

In a bourse filing, Ta Ann said it has inked conditional share sale agreements (SSAs) with several vendors today, to acquire AVSB’s entire stake.

AVSB's main assets are its sizable mineral soil land bank of 5,280 ha in Stungkor district in Lundu, of which over 5,090 ha have been planted with oil palms aged one to five years.

Ta Ann said the proposed acquisition is consistent with its plan to expand its oil palm plantation land bank in Sarawak, and that it is a strategic investment, given the scarcity of sizeable, suitable oil palm plantation lands there.

“With over 90% of the lands having been planted with oil palms, the proposed acquisition will contribute to the group’s fresh fruit bunch production and thus, its future earnings,” it said.

“The young age profile of the palms in the plantation is expected to contribute growing earnings to Ta Ann, which would increase shareholders’ value."

Ta Ann added that the strategic location of AVSB’s plantation in Sarawak, will enable further expansion in the neighbouring areas.

It expects to fund the proposed buy via internal funds and bank borrowings. The deal is expected to be completed in the first half of 2017.

Ta Ann closed up 13 sen or 3.77% today at RM3.58, for a market capitalisation of RM1.6 billion.