4 Min Read
By Jim Loney
MIAMI, June 24 (Reuters) - The $1.75 billion offer from the state of Florida for U.S. Sugar Corp and its Everglades cane fields came as a big surprise to a company that has farmed the fragile wetland for nearly 80 years, a senior company official said on Tuesday.
The deal, announced by Florida Gov. Charlie Crist and company officials, calls for the South Florida Water Management District to pay $50 million cash and to sell $1.7 billion in bond-like debt to acquire 187,000 acres of Everglades farmland, as well as U.S. Sugar's sugar and citrus processing plants.
As a result, U.S. Sugar, founded by businessman Charles Mott about 80 years ago and which says it is the largest U.S. sugar producer with about 700,000 tons of cane sugar a year, will go out of business.
"This idea frankly caught us off guard," U.S. Sugar Senior Vice President Robert Coker said of the idea put forward during a meeting between company officials and the governor's office.
"Our representatives obviously lost their breath and fell to the floor," he said.
U.S. Sugar has long been a target of environmentalists who say sugar and other farming has severely damaged the Everglades marshlands with chemical-tainted runoff.
The deal, hailed by those same environmentalists on Tuesday as a "watershed" moment in Everglades restoration efforts, will allow the state to acquire a critical land bridge between Lake Okeechobee and the southern reaches of the Everglades and Florida Bay.
Asked about what drove the company -- owned mainly by Mott's heirs and their foundations and about 30 percent by employees -- to sell now, Coker said it was largely concerns about the long-term sustainability of the business.
"What drove these decisions were very serious concerns about regulatory matters and environmental matters," he said.
Coker said Washington's recently passed farm bill was a "positive" for sugar growers but the company was disappointed by talks with the Bush administration over provisions of the Central American Free Trade Agreement that allowed more foreign sugar into U.S. markets.
The U.S. domestic sugar industry has long enjoyed the protection of import quotas and the benefits of costly subsidies that consumer rights groups say result in U.S. consumers paying artificially inflated prices for sugar.
While some environmentalists have been pushing U.S. Sugar to leave the Everglades for decades, Coker said the company had invested hundreds of millions of dollars in new technology in the past few years and had not been considering selling until the idea emerged in talks with Crist about seven months ago.
He said Crist had not told the company it was time to leave the Everglades, but rather the governor had proposed the idea of a government buyout "with his jaw set."
"Charlie's a visionary and he can be extremely persuasive," Coker said.
The state will buy U.S. Sugar "lock, stock and barrel," Coker said, including Clewiston Refinery and Clewiston Mill in the company town of Clewiston, Florida, and its 30,000 acres of orange groves and citrus processing plant.
The company is the largest supplier of not-from-concentrate juice to Tropicana.
"This deal is a win for the state of Florida, it's a win for the Everglades and the environment and it's a win for our employees and our shareholders," Coker said. (Editing by Michael Christie and Christian Wiessner)