Tokyo-based Marubeni to acquire US grain merchant Gavilon in $3.6bn deal | WPN World People News

Japan's largest agriculture trading house Marubeni will be acquiring the US grain merchant Gavilon Group in a $3.6 billion deal as it targets to expand operations and become a major global player in the foodgrains market.

The Gavilon acquisition would raise Marubeni's grain handling capacity to over 55 million tons annually, and allow it to reach American agricultural products to fast-growing Asian markets, particularly China, according to a statement from the Japanese company Tuesday.

The deal would also give Tokyo-based Marubeni far greater control of supply and distribution in the US, the world's largest agricultural exporter.

Relying on imports for a major share of its food requirement, Japan is the biggest customer of American agricultural produce.

"As part of a larger trading organization, Gavilon will be well-positioned to more efficiently connect supply with growing global demand," Greg Heckman, the chief executive of Gavilon, said in a statement.

Omaha based Gavilon is the third-biggest grain distributor and trader in the United States, behind Archer Daniels Midland and Cargill.

The company, whose investors include the billionaire George Soros, expanded its global presence through acquisition of the DeBruce Companies in 2011.

Orascom Construction Industries of Egypt in a separate statement said it was selling its 16.8 per cent stake in Gavilon to Marubeni for $605 million.

The Gavilon Group also confirmed its proposed acquisition by Marubeni Corporation.

"We are pleased that our strategic review process has resulted in an agreement to become a wholly owned subsidiary of Marubeni," said Greg Heckman, president and chief executive officer of Gavilon.

"As part of a larger trading organization, Gavilon will be well-positioned to more efficiently connect supply with growing global demand," Heckman said.

Connecting producers and consumers of feed, food and fuel through its global supply chain network, Gavilon also provides origination, storage and handling, transportation and logistics, marketing and distribution, and risk management services to tens of thousands of customers each year.

Morgan Stanley acted as sole financial advisor and Jones Day acted as legal advisor to Gavilon in connection with the transaction.

Source: United States News.Net