COFCO Corp, China's largest food company, has invited investment banks to submit proposals for a possible group restructuring, people with knowledge of the matter said.

The Beijing-based firm, which controls eight listed companies, will consider combining units and selling peripheral businesses to improve profitability, according to the people.

Possibilities that may be proposed include COFCO's cooking-oil producer China Foods Ltd divesting its confectionery business or merging with a sister company such as oilseed processor China Agri-Industries Holdings Ltd, they said, asking not to be identified as the information is private.

Listed affiliates of COFCO, which has operations in 140 countries, surged on Monday to add a combined $1.4 billion in market value.

The government-owned group was founded in 1949 and grew through a series of mergers to amass more than $57 billion of assets, according to its website.

"COFCO has been very active in acquiring overseas assets," said Liu Guanyu, a manager at Xiamen International Trade Group Corp, which buys and sells commodities including iron ore and rubber. "Its strategy now is to consolidate, to create a full industrial chain in the global agricultural market."

Market discipline

The State-run company, which last year bought controlling stakes in Dutch grain trader Nidera BV and Noble Group Ltd's agribusiness arm, is also weighing a plan to combine all the grain, edible oil and sugar businesses currently spread across different units, according to two of the people.

It would then seek a stock-market listing for the merged business by 2019, they said.

The government picked COFCO in July for a trial on improving the efficiency and returns of investments, part of a push by President Xi Jinping to introduce more market discipline at State-owned enterprises. COFCO has not yet hired an adviser or decided on a course of action, and any restructuring plan would need regulatory approval, the people said.

COFCO owns stakes in China Mengniu Dairy Co, the nation's second-largest dairy producer, and Joy City Property Ltd, which develops commercial real estate.

CPMC Holdings makes the aluminum cans used by China's best-selling Snow beer, while China Foods produces wine, sells cooking oil under the "Fortune" brand and bottles Coca-Cola Co beverages in parts of northern China.

Global trading

The group also runs tourist resorts, a regional bank and an insurance venture with London-based Aviva Plc.

COFCO said on May 12 it poached Matthew Jansen, a senior executive from US competitor Archer-Daniels-Midland Co, to lead its push into global agricultural trading. The government-owned firm spent $3.5 billion on acquisitions last year that will allow it to compete with Bunge Ltd, Cargill Inc and Louis Dreyfus Commodities BV as rising incomes drive up food demand in China.

Noble Agri Ltd, the venture COFCO formed after buying the agricultural arm of Hong Kong-based Noble Group, and Nidera both have large operations in Latin America and Eastern Europe, two key exporting regions for wheat, corn and soybeans.