By Yantoultra Ngui

KUALA LUMPUR--A Malaysian government agency said Friday it has bought a 37% stake in Indonesia's Eagle High Plantations Tbk PT (BWPT.JK) for $505.4 million as it aims to become one of the world's biggest palm-oil groups.

Federal Land Development Authority, or Felda, which controls the world's third-largest oil-palm plantation operator Felda Global Ventures Holdings Bhd. (5222.KU) in Malaysia, said it signed the deal with Indonesia's Rajawali Group through its unit FIC Properties Sdn Bhd.

The purchase will enable Felda to access a more-than 320,00 hectare land bank -- four times the size of Singapore -- inIndonesia, it said in a statement. The land bank includes more than 125,000 hectares of existing plantations, Felda added.

The acquisition will help Felda and its associate companies make further inroads into Indonesia's domestic market, Felda said.

Felda said it couldn't disclose more details on the acquisition pending approval from authorities in Malaysia and Indonesia.

Shares of Eagle High were 8.8% higher at 298.00 rupiah on Friday, outperforming the Indonesian benchmark stock index's 0.3% decline.

Write to Yantoultra Ngui at yantoultra.ngui@wsj.com

(END) Dow Jones Newswires

December 23, 2016 06:04 ET (11:04 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.