The multimillion dollar palm oil deal we should all be worried about
A tie-up is on the cards between two palm oil companies with worrying track records. If it goes ahead it could have huge implications for the palm oil sector. It’s a multimillion dollar tie-up that you’ve heard little about, but could have major implications for the drive towards a more responsible palm oil sector.
After several weeks of speculation, it is expected that Malaysian state-owned commodities company Felda is about to conclude negotiations on the acquisition of a 37% stake in palm oil company PT Eagle High Plantations.
This follows an aborted $680m deal late last year, the collapse of which was put down to heavy criticism from investors who felt the deal was too expensive. British bank Standard Chartered was also pulled into controversy over the deal and became the target of a campaign asking it not to loan money to Felda.
The deal would bring together two laggards in the palm oil industry when it comes to their lack of commitments towards sustainable palm oil.
Both companies control significant areas of land – Felda Global Ventures Holdings, Felda’s main listed entity, describes itself as “the world’s largest palm oil producer and oil palm plantation operator, based on planted hectares” and Eagle High is the sixth largest palm oil company on the Indonesian Stock Exchange, based on planted area.