France’s InVivo aims to become top world malt producer after Soufflet takeover

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  • InVivo completes acquisition of French agribusiness peer
  • Aims to double size of malt business with help of new investors
  • Combined group to have 10 bln euros in annual sales

PARIS, Dec 9 (Reuters) - InVivo aims to become the world's largest producer of beer ingredient malt within five years, supported by new investors after it completed the acquisition of agribusiness peer Soufflet, its chief executive said on Thursday.

The takeover, which values Soufflet at 2.2 billion euros ($2.5 billion), will give rise to a group with nearly 10 billion euros in sales from activities spanning grain trading and wine distribution.

It marks a new stage in CEO Thierry Blandinieres' overhaul of InVivo, a combination of nearly 200 farmer cooperatives that he would like in future to rival global crop merchants such as Archer Daniels Midland Co (ADM.N) and Cargill.

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To help finance the acquisition, InVivo is selling a minority stake in Soufflet's malt division to KKR (KKR.N), Credit Agricole (CAGR.PA) and Bpifrance for 440 million euros.

InVivo aims to double the size of its malt business through external growth. Deals are already being studied in South Africa, the United States, Australia, India and South America, notably Brazil, Blandinieres told Reuters on the sidelines of a news conference.

“We will be the biggest, with a share of 20% of the world market since we have 10% today. This is really what is at stake, why we are giving ourselves the means and why financial players have entered the capital," he said of the malt business.

To finance the purchase of Soufflet, InVivo also used around 1 billion euros in proceeds from the sale of its animal nutrition unit to ADM in 2019, as well as some debt, he said.

It has also entered exclusive talks to sell the Soufflet Alimentaire unit to French oilseeds and protein group Avril.

InVivo later announced in a separate statement that it had obtained a 1.65 billion euro bank loan that would partly support future investments.

In grain trading, InVivo and Soufflet would continue to operate separately, but risk strategy would be shared and current Soufflet trading chief Jean-Francois Lepy would take overall charge, Blandinieres added.

InVivo and century-old family firm Soufflet are among the largest players in the French agricultural sector, the EU's biggest.

Soufflet Chief Executive Jean-Michel Soufflet will stay with the group for a few months to support the transition, Blandinieres added.

The closing of InVivo's takeover of Soufflet followed approval last month by the European Commission after the deal was agreed in May.

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Reporting by Sybille de La Hamaide Writing by Gus Trompiz Editing by Mark Potter, Elaine Hardcastle

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