Marubeni buys US firm Gavilon as it eyes China
JAPANESE trading house Marubeni is to buy US grains merchant Gavilon for $3.6bn (£2.3bn), the company said yesterday, as it targets China’s growing demand for corn from North America, the world’s top grain export hub.
China’s corn purchases are expected to surpass Japan’s annual imports of about 16m tonnes, the world’s largest, within as little as three years, analysts say. China is already the world’s top importer of soybeans.
The US grain trader has about $2bn in debt, Marubeni said, which would take the total value of the transaction to $5.6bn. The acquisition would be partly financed by bank borrowing, the Japanese firm added.
It is the largest overseas acquisition, including debt, in agriculture or energy by a Japanese company since Japan Tobacco bought British cigarette manufacturer Gallaher Group for almost $19bn in 2006, according to Thomson Reuters data.
Marubeni, Japan’s fifth-largest trading company, had been in advanced talks to buy Gavilon since early May. Gavilon is the largest transaction in Marubeni’s history, the company said.
Marubeni expects its global grain handling to rise to 55m tonnes in the year to March 2013, when it adds Gavilon’s 30m tonnes to its business, coming closer in size to global grain giants like Cargill, Daisuke Okada, an adviser on food products to Marubeni President Teruo Asada, said at a briefing in Tokyo.
The company also said it expected the acquisition to lift its bottom line by more than $100m from next year.