CHICAGO Oct 29 The Andersons, a
diversified agricultural company with the nation's seventh
largest grain storage capacity, will buy 12 grain elevators from
Green Plains Renewable Energy for $133.1 million, the
companies said on Monday.
Ohio-based Andersons struck a deal for seven facilities in
northwest Iowa used for elevating, storing and discharging grain
and five in western Tennessee, increasing its grain storage
capacity by 30 percent. The facilities have a combined grain
storage capacity of about 32 million bushels, along with 12,000
tons of nutrient storage and more than 130 employees.
It is the largest acquisition in The Andersons' 65-year
history, and comes at a time of accelerating consolidation in
the grain industry.
Earlier this month, the buying frenzy intensified with news
that U.S. agriculture giant Archer Daniels Midland was
making a play for smaller Australian shipper GrainCorp.
Agriculture companies are scrambling to increase their
physical assets during intense competition for grains trading
power to feed fast-developing countries seeking food security.
Nearly seven months ago, ADM pulled out of the race to buy
Viterra, which was eventually bought by No 1 global commodities
trader Glencore in a deal worth C$6.2 billion ($6.2 billion
In May, Japan's Marubeni bought U.S. grain merchant
Gavilon, whose owners included billionaire investor George
Soros, highlighting the intensifying competition for a foothold
in the North American supply chain.
The Andersons' focus remains on the domestic market in the
United States, as it adds to holdings that include elevators
across the eastern Midwest and nearly 23,000 railcars -- the
country's eighth largest private fleet.
"This acquisition is consistent with our strategy of
expanding our footprint into high grain production geographies
where we can leverage our core capabilities to serve more
customers in diverse trade areas," Denny Addis, president of The
Andersons grain group, said about the deal with Green Plains.
"It enables us to push further to the west and south,
increasing our presence in Iowa and entering Tennessee," he
Green Plains, the fourth largest ethanol producer in the
United States, is shedding 83 percent of its grain storage
capacity with the deal. It also is selling its only two farm
agronomy centers to The Andersons.
Once closed, the transaction will add more than $100 million
in cash to Green Plains' balance sheet and reduce outstanding
debt by more than $113 million, according to the company. The
deal is expected to close in the fourth quarter.
"We continually evaluate options to maximize shareholder
value and this transaction is about opportunistically realizing
that value," said Todd Becker, Green Plains president and chief
executive officer. "While we have referred to this as a
strategic part of our business, we are by no means exiting U.S.
Some ethanol producers faced financial pressures from the
worst U.S. drought in more than half a century, which tightened
corn supplies and pushed corn prices to record highs.