KUALA LUMPUR: Timber products manufacturer Ta Ann Holdings Bhd is acquiring 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 had inked conditional share sale agreements with several vendors yesterday for the acquisition.

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

Ta Ann said the 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.

Ta Ann added the strategic location of AVSB’s plantation will enable further expansion into the neighbouring areas.

It expects to fund the acquisition via a combination of 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% yesterday at RM3.58, with a market capitalisation of RM1.6 billion.