KUALA LUMPUR/FRANKFURT, July 13 (Reuters) - German specialty chemicalsfirm Cognis is transferring its oleochemicals business to an existingjoint venture with Malaysian palm oil maker Golden Hope Plantations , thecompanies said on Wednesday.A source close to the deal said the Malaysian company will invest about200 million ringgit ($52.6 million) into the expanded joint venture. ACognis spokeswoman said financial details would not be released.

Oleochemicals are chemicals derived from fats or animal and plant oilslike palm oil, and are used in detergents, soaps, cosmetics and foods.

Unlisted Cognis will also transfer its oilfield chemicals and its plastictechnology business to the joint venture, Cognis Oleochemicals (M) SdnBhd.

After the expansion, the joint venture will have sales of more than $850million based on 2004 figures, making it one of the world's leadingoleochemical makers. It had sales of $160 million last year.

Prices of Cognis bonds rose on the news, with the company's May 2014high-yield bond adding about one percentage point to be bid at 110.75percent of face value, HVB high-yield credit analyst Jochen Schlachtersaid.

"This is a reasonable reaction to what is only an intermediate step, in myopinion," Schlachter said.

"There has to be a further step, in order to fully and completely exit thebusiness, which is clearly weighing down the margins of the group."

Golden Hope's shares were suspended on Wednesday. They closed flat onTuesday at 3.98 ringgit.

REACTING TO MARKET

The Cognis spokeswoman said the company was responding to a shift ofoleochemical production to Asia with the move.

"We are doing this in reaction to the shift in the market where we arefacing growing capacities in Asia," she said.

"It's important to widen the scope of the business. The deal hasadvantages for both partners -- forward integration for Golden Hope and astrategic partner in the sourcing area for Cognis," she said.

Golden Hope Chief Executive Sabri Ahmad told a news conference that thecombined oleochemical businesses would be operated from corporateheadquarters in Kuala Lumpur rather than from Cognis's base nearDusseldorf.

Company officials from the two sides signed a deal on Wednesday thatenvisages new units in Britain, Brazil and Japan to manufacture plastics,they said.

Cognis, owned by Permira, GS Capital Partners and SV Life Sciences, wascarved out of German detergent, glue and soap maker Henkel in 1999, andmakes a range of chemicals that go into detergents and cosmetics.(Additional reporting by Quentin Webb in London)