TOKYO Nov 6 Marubeni Corp, which in
May sealed a $5.6 billion deal to buy U.S. grain merchant
Gavilon, said on Tuesday it's still waiting for Chinese
regulators to approve the deal, but denied tensions between
Tokyo and Beijing are causing the holdup.
The transaction, which has now received clearance from U.S.
anti-competition authorities, was delayed by at least two months
from September due to talks on ownership of an important U.S.
west coast export terminal and regulatory reviews, people
familiar with the matter told Reuters in August.
Teruo Asada, president of Marubeni, denied media speculation
that the recent tension between Japan and China over disputed
islands in the East China Sea has delayed the Chinese approval.
"The deal is going ahead. We believe the examination is
proceeding in line with how they have usually been considered
in the past," Asada told a media briefing on the trader's
The deal, which includes debt of around $2 billion,
catapults Marubeni, Japan's fifth-biggest trading house, into
the top ranks of global grain merchants and puts it in pole
position to meet rising demand for grains from China.
Asada said it may have to go through further U.S. approvals
focusing on the consolidation of U.S. grain storage facilities.
Marubeni's chief financial officer Yukihiko Matsumura told a
news conference last week that the company expects to complete
the deal by the end of December or early January.
Almost a quarter of Japanese manufacturers are rethinking
their investment plans in China and some may shift future
production elsewhere after the spike in tensions between Asia's
two largest economies.
Marubeni is concerned Chinese authorities will be slow to
consider the purchase of Gavilon, the Nikkei newspaper reported
Marubeni will finance the deal, its biggest acquisition,
half by cash and half through bank borrowing, Matsumura had
Marubeni last week slashed its annual net profit forecast
for the food business by 40 percent to 13.5 billion yen ($168
million) as a decline in margins in wheat trading due to the
U.S. drought this summer cut profitability.
Asada said he expects margins to improve in the second half
following an expected recovery in wheat prices.