ADM and Bunge

[Klause]

Yay...



More consolidation.

[helmsdale]

Would love to see a return to the trust busting of days gone by...

A few more "carillions" and perhaps authorities will find the will once again?

[malleefarmer]

Archer-Daniels-Midland Co. sought merger talks with Bunge Ltd., said a person briefed on the matter, potentially setting up a battle for control of the giant agricultural trader with Glencore Plc.

ADM’s recent approach was preliminary and it’s unclear whether a deal can be done, said the person, who asked not to be identified because the talks are private. Glencore, the world’s largest commodities trader, approached Bunge last year over a merger, but was rebuffed and signed a standstill agreement that prevents it making a hostile bid for the time being.

Bunge is the B in the so-called ABCD companies that dominate global agricultural trade, alongside ADM, Cargill Inc. and Louis Dreyfus Co. After several years of bumper crops, trading profits have fallen, prompting industry executives to talk of consolidation.

ADM and Glencore declined to comment. Bunge did not respond to messages seeking comment.

Bunge shares rose 11 percent on Friday, the most since May, after the merger talks were first reported by The Wall Street Journal. That raised its market value to almost $11 billion, compared with close to $23 billion for ADM.

ADM and Glencore previously sparred in 2012, when they both sought to buy Canadian grain trader Viterra. Glencore won, paying C$6.1 billion ($4.8 billion), and subsequently sold a large chunk of the company to several others, keeping for itself the trading business.

An ADM merger with Bunge would probably face significant antitrust hurdles in the U.S. The Chicago-based firm could need to find a partner to take some of Bunge’s North American grain silos and processing plants.

Bunge, based in the outskirts of New York, has struggled over the last year and a half. It cut profit guidance several times as large surpluses of wheat, corn and soybean reduced trading opportunities. Soren Schroder, Bunge’s chief executive officer, said in July that clear overcapacity in the industry meant there was a need for consolidation.

[farmaholic]

Soren Schroder, Bunge’s chief executive officer, said in July that clear overcapacity in the industry meant there was a need for consolidation.

Sounds like what he calls over capacity is actually too much competition

[grassfarmer]

It cut profit guidance several times as large surpluses of wheat, corn and soybean reduced trading opportunities. Soren Schroder, Bunge’s chief executive officer, said in July that clear overcapacity in the industry meant there was a need for consolidation.

That's a rather strange statement for sure. Surpluses of crops reduce trading opportunities? how so? should increase trading opportunities both on a price and volume basis shouldn't it?

[malleefarmer]

That's a rather strange statement for sure. Surpluses of crops reduce trading opportunities? how so? should increase trading opportunities both on a price and volume basis shouldn't it?

Nope grass markets are often finite unless end users etc decide to go very long and buy a years supply etc.

But hand to mouth stuff once markets are full or supplied they will run down stocks in hope of lower prices weras grower we do opposite hold in hope of higher prices, balancing act doent take much to change sntiment though eg nd sd montana percieved drought this year just gone. For a short while there were opportunities for traders and farmers

[grassfarmer]

But a surplus of supply brings opportunities on price if not on volume surely?

[bgmb]

Holy F if there were every a place for some government intervention this would be it. Although that will never happen stick to carbon taxes and other pointless policies where they have no business