Wilmar International says unit, PGEO Group Sdn Bhd, has entered into a subscription agreement with FFM Berhad, a unit of PPB Group Berhad, to subscribe for 55,781,250 new shares of RM1 (41.6 cents) each in FFM, or 20% of FFM’s total enlarged share capital, for RM378,118,781.25 ($157.3 million).

In return, the two companies will enter into negotiations regarding the sale of a 20% equity interest in selected subsidiaries of Wilmar in China to Waikari Sdn Bhd, a subsidiary of FFM.

FFM started its first flour mill in Malaysia in 1966 and over the years has built up considerable technical and marketing expertise in the flour milling business. Today, the FFM group owns and operates four flour mills in Malaysia, and one each in Vietnam, Thailand and Indonesia with a combined total capacity of 4,130 tonnes per day. The group is currently constructing its fifth flour mill in Malaysia, which will increase its milling capacity by another 220 tonnes per day.