Report: Japan's Marubeni shows interest in Gavilon
May 8, 2012
by Eric Schroeder
TOKYO — Marubeni Corp., Japan’s largest grain trading company, is in talks to buy Omaha-based Gavilon Group L.L.C. for about $5 billion, including debt, according to Bloomberg.
“Certain news agencies have today reported on matters relating to the acquisition of U.S. firm Gavilon by Marubeni Corp.,” Marubeni said in a May 8 statement posted on its web site. “These reports do not constitute official announcements by Marubeni Corp. No facts relating to this matter have been confirmed.
“Marubeni Corp. will promptly announce any matters that require disclosure.”
According to Bloomberg, though, the negotiations are in the final stages and a deal may be announced in the next several days.
Marubeni’s grain business operates as part of its Food Materials Division. The division is the top trader among general trading companies with annual grain trading volume of about 20 million tons, Marubeni said, and the company is bolstering efforts to develop sales operations worldwide, along with measures targeting grain production markets. Additionally, the company has a framework for grain procurement composed of diverse production sites worldwide, and is developing global sales operations. Leveraging internationally competitive grains, the division not only provides Japan with a stable grain supply, but is also building a structure for flexibly supplying grain to meet growing global demand.
Previously, Glencore International P.L.C., Baar, Switzerland, and Bunge Ltd., White Plains, N.Y., expressed interest in Gavilon.
Privately-held Gavilon L.L.C., one of the largest grain, processing and merchandising companies in the United States, in mid-January acknowledged that strategic alternatives are under exploration at the company.
The company was established in 2008 with the sale by ConAgra Foods Inc. of its Trading and Merchandising business to Ospraie Management L.L.C. Special Opportunities Fund in a $2.1 billion transaction. With the sale, the business was renamed Gavilon L.L.C. Ospraie remains the principal owner of the business.
Since it became a privately-held company, Gavilon has grown rapidly with a number of significant actions, including acquisitions and capital expenditures. Gavilon operates 300 facilities and regional offices worldwide. The company estimated its business mix, as measured as share of earnings, at 62% grain and ingredients (mostly origination, storage and distribution), 20% energy (storage, transportation and logistics) and 18% fertilizer (distribution).
According to the 2012 Grain & Milling Annual, Gavilon was the third largest grain storage company in the United States.