ADM mum on Bunge rumours

American commodities trader Archer Daniels Midland (ADM) said Tuesday it will look for ways to grow its business through strategic mergers and acquisitions, but it declined to comment on a rumoured takeover involving rival company Bunge Ltd.

In a Feb. 6 conference call with investors, ADM’s chief executive officer Juan Luciano said he would not comment on media reports suggesting that ADM is close to reaching a deal to acquire Bunge, a company valued at roughly $11 billion US.

ADM reported solid fourth quarter earnings, recording a net profit of US$788 million US in the three-month period ended Dec. 31, up from $424 million in Q4 2016.

Total revenue for the quarter was down 2.6 percent to $16.07 billion.

ADM said large supplies of grain coming out of South America are expected to pressure American agricultural exports.

Global grain supplies are likely to tighten in 2018, based on weather related concerns in key production areas of Argentina, Russia, Australia, South Africa and the United States, the company added.

“If we go around the world … we already know enough to probably conclude the 2018 weather will be less favourable to crops … than it has been over the last four years,” Luciano told investors.

“We see things tightening up a little bit at a time when demand continues to be very strong, so that could bode well for our ag services business.”

On Feb. 5 Bloomberg reported that ADM could reach an agreement to buy Bunge as early as this week.

So far, both ADM and Bunge have refused to comment.

Contact brian.cross@producer.com

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