SINGAPORE/PARIS (Reuters) – Louis Dreyfus is in talks with smaller rival Olam International about a possible merger or joint venture that could extend Dreyfus’ global reach and open up its closely held family ownership.
Louis Dreyfus, whose commodities arm generates about $35 billion in revenue, is a key player in agricultural commodities worldwide.
In Canada, its holdings include its partnership in the LDM Foods canola crushing plant at Yorkton, Sask., and its network of 11 prairie grain terminals.
Olam, a $4.7 billion company that generated $7.9 billion in revenue in 2009-10, said the talks were still at an early stage.
Read Also
U.S. government investigates high input costs
The USDA and DOJ are investigating high input costs, but nothing is happening in Canada.
“If there is a merger, they could take advantage of economies of scale and geographical locations. Olam is strong in Africa, Dreyfus is strong in the United States,” said DBS Vickers analyst Ben Santoso.
“If you have a merger between these two, then they could easily rival the bigger competitors such as Cargill, Bunge or Archer Daniels Midland,” he said.
French newspapers said Louis Dreyfus was considering turning some of it activities into publicly traded companies.
Such a move would make it easier for Dreyfus’s family members to sell their holdings.
