A Japanese trading firm is the latest company attempting to secure a major stake in the rapidly consolidating global grain industry.
Executives from Marubeni Corp., announced that the company has agreed to buy Gavilon Group, the third largest grain handling company in the United States, for $3.6 billion US.
The proposed deal would also see Marubeni assume existing Gavilon debts estimated at $2 billion, bringing the total value of the transaction to $5.6 billion.
The Marubeni announcement, confirmed by Gavilon Group president Greg Heckman, was made May 29, the same day that shareholders of Canada’s largest grain company, Viterra, approved a $6.1 billion dollar takeover by Switzerland-based Glencore.
Read Also
Canadian economy going ‘under the speed limit,’ says FCC analyst
Farm Credit Canada outlined less than impressive numbers for Canada’s economy Sept. 18, and that will spill over into agriculture.
“Global grain volumes are expected to continue to grow given the strong demand coming from developing nations, in particular China,” Marubeni officials said in a May 29 news release.
“With this acquisition, Marubeni will have gained over 140 grain loading sites and access to a vast grains storage and distribution network in the U.S.”
“The main objective is to expand exports to Asia, including Japan,” added Daisuke Okada, head of Marubeni’s food division, in an interview with the Financial Times.
“We expect Chinese corn imports to grow … and we believe North America will be the supplier of Chinese grain demand, so that is why we are most attracted to Gavilon.”
Gavilon, based in Omaha, Nebraska, is involved in the grain, fertilizer and energy industries and has roughly 300 locations around the world.
Gavilon’s website says the company employs 2,000 people and operates 74 fertilizer handling facilities and 145 grain handling facilities.
