The merger, which would create a company worth US$34 billion including debt, would bring the combined company closer in global scale to Bunge’s leading rivals ADM and Cargill.

The proposed combination with Glencore-backed Viterra, however, is attracting scrutiny from regulators concerned about consolidation in the agricultural sector.

Heckman told Reuters healthy commodities market competition in Canada, the U.S., Brazil, Argentina, China and parts of Europe should allow Bunge to avoid having to sell assets to gain approval for the merger from antitrust authorities.

But if asset liquidations are required, Bunge believes demand for its assets is very strong, Heckman said at Reuters’ Transform Food USA event in Minnesota.

“If we have to sell some assets, everybody has called to be on the list to buy them. We’ll get a very fair price,” he said.

Bunge expects to finalize the deal by mid-2024 after closing conditions are met and regulators sign off on the deal.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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Exchange Income Corp. (EIC) announced Oct. 5 it has bought DryAir Manufacturing of St. Brieux for about $60 million in cash and EIC stock.

DryAir, in business since 1994, produces hydronic central heating and drying systems — that is, systems that use circulating fluids for heating or cooling — for applications such as construction site heating, ground thawing and concrete curing, among others.

The company’s grain drying system uses a hydronic central heating unit to distribute heated fluid to sets of portable coils, which heat the intake air to be fed into grain bins via aeration fans. DryAir systems have been similarly used in commercial processing, such as drying dehydrated alfalfa pellets.

“DryAir checks all the boxes that we look for in acquisitions,” EIC CEO Mike Pyle said in a release. “They have a strong management team, company culture, industry reputation and sustainable growing cash flows.”

“We are consistently recognized for the quality of our products and that can only be accomplished with the help of each and every one of our employees in St. Brieux,” said DryAir founder Claude Bourgault, whose brothers Gerry and Joe are the presidents of St. Brieux-based ag equipment makers Bourgault Industries and Bourgault Tillage Tools, respectively.

“When we decided to sell, we foremost wanted a partner that held the same values as ourselves and our community.”

Bourgault and DryAir CEO and co-owner Myrlen Kleiboer will remain in their management roles with the company. “We know EIC will continue to support our employees and St. Brieux which was an important objective in defining our legacy,” Kleiboer said in the same release.

DryAir, Kleiboer said, “will continue to pursue new product development and creating new technologies for our ultimate customers.”

EIC’s other holdings include Canadian regional airline operators such as CalmAir, Perimeter Aviation, CarsonAir and the PAL Group, and several industrial parts and equipment manufacturers such as LV Control Manufacturing, a Winnipeg firm that makes control and automation systems for agricultural material processing and handling.

EIC’s acquisition of DryAir takes the form of $45 million in cash from its credit facility and $15 million in EIC shares, the company said. — Glacier FarmMedia Network

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The group on Wednesday reported a jump in annual net profit to $1 billion, joining other global crop merchants in benefitting from high prices and strong demand in a year marked by Russia’s invasion of fellow grain exporter Ukraine (all figures US$).

LDC wants to accelerate capital expenditure, including on “complementary” acquisitions, to between $800 million and $1 billion annually during the rest of this decade, CEO Michael Gelchie said in an interview.

That compares with 2022 investments of $549 million, which already marked a rise from $372 million the prior year.

“That can and should be in the form of greenfield or brownfield or M+A-type investments (…), whether that’s core merchandising or in innovative business that really diversifies our portfolio,” Gelchie said.

Last year’s investments included the acquisition of Australia’s Emerald Grain. The deal price was about $102 million, subject to closing adjustments, LDC said in its annual report.

Improved results and the sale of a stake in 2021 to Abu Dhabi holding firm ADQ have eased pressure on LDC and main shareholder Margarita Louis-Dreyfus after years of modest profits and mounting debt.

Like its peers, LDC has been developing food ingredients activities, including plant-based proteins, to tap into consumer trends and be less reliant on commodity markets.

The group announced in December the creation of a food and feed solutions division.

Gelchie declined to give an outlook for LDC this year but said turmoil in the banking sector and rising interest rates may increase market volatility further.

Higher interest rates could dampen commodity demand and prices in the near term, though the longer-term outlook for commodities appeared bullish given an energy transition that has already boosted oilseed crushing margins for renewable fuel in North America, he added.

Regarding upheaval in the banking sector, Gelchie said LDC had no exposure to Credit Suisse and had “secure relationships” with its banks.

He declined to comment on any exposure to Credit Suisse for chairperson Louis-Dreyfus, whose holding firm had a reduced loan arrangement with Credit Suisse worth around $240 million as of September 2021.

— Reporting for Reuters by Gus Trompiz in Paris.

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Under the deal, which was announced last August, Sanderson is being combined with Continental Grain subsidiary Wayne Farms. Sanderson will cease trading on Friday.

The new business, to be called Wayne-Sanderson Farms, will be headquartered at Oakwood, Ga., northeast of Atlanta, and will be led by Wayne Farms CEO Clint Rivers.

Any outstanding issues with the Justice Department were resolved prior to close, according to a person familiar with the matter.

The deal had raised concerns on Capitol Hill, where lawmakers asked for the Justice Department to take a hard look at it because of fear of pushing up prices.

The Justice Department, which had been investigating the deal for antitrust concerns, declined comment.

Chicken wings and breasts have climbed 38 and 24 per cent since February year-over-year, respectively, according to research from Wells Fargo.

The Biden administration, concerned about price hikes in general and especially in the meat sector, announced in January that it would spend US$1 billion and issue new rules as a way to address a lack of “meaningful competition” in meat processing.

— Reporting for Reuters by Diane Bartz. Includes files from Glacier FarmMedia Network staff.

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The firm, formerly known as Glencore Agriculture, made the headlines in 2017 for a failed takeover approach to Bunge, one of the giant names of global grain trading, then valued at $11 billion (all figures US$).

Four years later, its owners have not made any sizeable deal and are still exploring ways to show value at a time of sustained higher grain prices. They are more likely to buy smaller or privately-held companies, expanding mostly in the U.S., but also South America and Australia, where Viterra already owns assets, the sources said.

Glencore owns 50 per cent of Viterra, having sold the other half to Canadian pension funds CPP Investments and British Columbia Investment Management Corp. (BCI) in 2016, for a total $3.125 billion.

Glencore, Viterra and CPP Investments declined to comment. BCI was not immediately available to comment.

With an EBITDA (earnings before interest, taxes, depreciation and amortization) of $991 million in the first half of 2021, the company holds 180 storage and handling facilities, 30 processing and refining plants and 25 port terminals, used to handle millions of tonnes of grains, oilseeds, pulses, rice, sugar and cotton around the world.

The company’s last deal was in 2020, when it bought out the stake it didn’t already own in Argentine soy crushing plant Renova from its bankrupt partner.

Other large western grain trading houses, including Archer Daniels Midland, Cargill and Louis Dreyfus, which battled years of global oversupply and thin margins, have seen their fortunes turn during the COVID pandemic as governments and food companies rushed to stockpile.

Still, the sector is ripe for a wave of consolidation similar to the mergers and acquisitions in the farm chemicals and seed industries to face off stiff competition from Asian rivals and guarantee supplies against shortages.

There is a big number of medium-sized companies and co-operatives, including The Andersons, Scoular and CHS among others, in the U.S., where agriculture and food contributes more than $1 trillion a year to the economy.

— Clara Denina is a Reuters correspondent in London, England; additional reporting by Maiya Keidan in Toronto.

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Rejean Nadeau, the CEO of Sollio Co-operative’s meatpacking and processing arm since 1996, died Thursday at his home at Rougemont, Que., about 25 km south of St-Hyacinthe, Olymel said in a release.

Olymel said its board had been informed of Nadeau’s “inability to perform his duties due to illness” just a week earlier, on Oct. 7.

Yanick Gervais, Olymel’s senior vice-president of operations, was asked at that time to “assume the duties of CEO for as long as deemed necessary,” the company added.

Quebec’s hog farmer association, les Eleveurs de porcs du Quebec, reacted “with sadness” to the news in a statement posted on Twitter Friday morning, describing Nadeau as an “emblematic” figure in agrifood.

Nadeau, the organization said, had “devoted a good part of his professional life” to the pork sector right up until his death.

EPQ president David Duval said it’s partly due to Nadeau’s business sense that Olymel has been able to succeed on a global scale where other businesses fell by the wayside. The strength of the sector is in its synergies, he added, and Nadeau in that sense was a “longtime collaborator” with the hog industry.

Nadeau joined Sollio, then known as Coop federee, in 1976. During his tenure as the meatpacking arm’s CEO, he merged the Quebec-based co-operative’s pork and poultry businesses under the Olymel banner in 1998.

He expanded the business through acquisitions such as the Fletcher’s Fine Foods pork plant at Red Deer, Alta., now Canada’s largest hog slaughter and processing plant, in 2001; Supraliment, the meat division of Groupe Brochu, in 2005; Saskatchewan hog producer Big Sky Farms and Alberta producer Pinnacle Farms, in 2013 and 2016 respectively; Trois-Rivieres sausage maker La Fernandiere, in 2016; Triomphe Foods and Pinty’s in 2018; and Quebec processor F. Menard last year.

The company also expanded its reach through joint-venture partnerships during Nadeau’s tenue, such as turkey processor Unidindon, with Exceldor; New Brunswick chicken slaughter and processing operation Sunnymel, with Westco; and pork processor Lucyporc, with Atrahan Transformation and Groupe Robitaille.

“In less than 20 years, Rejean Nadeau spearheaded an expansion that has given Olymel an active presence in Quebec, Ontario, New Brunswick, Saskatchewan and Alberta,” the company said.

Nadeau “has always taken great pride in promoting Quebec and Canadian products on both the domestic and international markets,” Olymel vice-president Paul Beauchamp said in Friday’s release.

In a “final farewell” message to Olymel management and employees, Nadeau was quoted as saying “Pay attention to your colleagues, smile, question your attitude and your way of leading, and be open to change: at times it will be technological and will push our business model to evolve; you will see our old face-to-face model become hybrid; at times the path of growth and development will send shockwaves through the organization, and in the end, management will experience a new boom under new leadership.”

Those objectives, he said, “are all challenges that I know you are capable of meeting, like a tight-knit family.”

Nadeau’s family will “soon” announce the date and place for a memorial service, the company added. — Glacier FarmMedia Network

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CN now has until the end of Friday to submit a better offer or lose its deal with KCS. At stake is the creation of the first direct railway linking Canada, the United States and Mexico.

KCS’s change of heart came after the U.S. Surface Transportation Board (STB) rejected a temporary “voting trust” structure last month that would have allowed KCS shareholders to receive the $325-per-share cash-and-stock consideration under the deal with CN without having to wait for full regulatory approval.

CP has had its proposed voting trust cleared by the STB. The regulatory certainty this provided convinced KCS’s board to switch to a deal with CP, even though its offer was lower than CN’s, according to people familiar with the deliberations.

There is a silver lining for KCS. The CP offer it now plans to accept, worth $300 per share in cash and stock, is better than the $275 per share cash-and-stock deal that the two companies had clinched in March, before CN gatecrashed it and entered into an agreement with KCS in May (all figures US$).

Were CN to lose out to CP, it would receive from KCS a $700 million breakup fee and would be reimbursed for another $700 million it paid KCS to pass on to CP as a breakup fee for terminating their March deal. CP has said it will cover the cost of this $1.4 billion that KCS would owe CN.

CN has also faced pressure from some of its investors, including hedge fund TCI Management, to abandon its pursuit of KCS.

CN did not immediately respond to a request for comment on its next steps.

The STB said last month that even though the overlap of CN’s and KCS’s networks was confined to 113 km between Baton Rouge and New Orleans, the two railways operated parallel lines in the central portion of the U.S. and could be under less pressure to compete if the voting trust for that deal was approved. It added that it was not making a final determination on whether the competitive issues that the deal faced could be resolved under a full regulatory review.

U.S. President Joe Biden has issued sweeping executive orders aimed at promoting competition in the U.S. economy. One order encouraged the STB to consider Amtrak’s statutory rights when assessing whether a rail merger is in the public interest.

Passenger railroad Amtrak, majority owned by the U.S. government, had opposed CN’s proposed voting trust, saying its pledge to divest the Baton Rouge to New Orleans line will harm future passenger service in Louisiana.

CP reiterated Sunday that its merger with KCS would maintain all existing freight rail gateways and maintain competition in the Baton Rouge to New Orleans corridor, while “creating new north-south lanes” between Western Canada, the U.S. upper Midwest and the Gulf Coast and Mexico.

Also, CP said, its deal with KCS would create a route network that “does not funnel all of its traffic through the congested Chicago area.”

— Reporting for Reuters by Radhika Anilkumar in Bangalore and Greg Roumeliotis in New York. Includes files from Glacier FarmMedia Network staff.

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Montreal-based Saputo announced Monday it has an all-cash deal in place to buy Wensleydale Dairy Products Ltd. for 23 million pounds (about C$39.7 million).

Pending U.K. regulatory approvals, the deal is expected to close in the second half of this month, after which Wensleydale, which has about 210 employees at two North Yorkshire plants, would join Saputo’s U.K. dairy division as part of its Europe sector.

Saputo said the Wensleydale product line, which is exported worldwide, “will complement and broaden the company’s existing range of British cheeses” such as Cathedral City and Davidstow cheddars.

The Wensleydale business sources its milk from 40 North Yorkshire-area farms and uses its own unique cheesemaking starter cultures, Saputo said.

Wensleydale “is home to an immense amount of passion, care, and tradition,” Saputo CEO Lino Saputo said in Monday’s release.

Wensleydale was awarded Protected Geographical Indication (PGI) status by the European Commission in late 2013 “to protect the authenticity of its Yorkshire Wensleydale cheese,” the British company noted.

European PGI status recognizes the “distinctive qualities” of the cheese as well as the geographical area in which the cheese is made, “in its rightful home of Wensleydale,” the company said last month.

Last month, the company noted it would also seek status for Yorkshire Wensleydale cheese under the recently introduced U.K. geographical indication (GI) schemes to “help shoppers differentiate it over other Wensleydale cheeses, made in other counties.”

“Our creamy, crumbly iconic Yorkshire Wensleydale cheese is extremely important to us and something we are proud to protect. It is important for us and our loyal customers that it is handcrafted here in its rightful home of Wensleydale,” Sandra Bell, the British company’s marketing manager, said in a release at the time.

“The GI schemes and logos are essential to differentiating unique British brands on-shelf, ensuring we continue to protect the authentic heritage and provenance of handcrafted Yorkshire Wensleydale cheese.” — Glacier FarmMedia Network

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The company’s prospectus to list on Shanghai’s Nasdaq-style STAR Market was posted online by the Shanghai Stock Exchange on Friday, confirming details reported this week by Reuters after the application was filed on Wednesday.

“Syngenta Group will expand and renovate its production facility and implement strategic acquisition to meet growing market needs,” the company said in the document.

Syngenta said in the filing that its application to list on the STAR Market had been approved and it would issue up to 2.79 billion shares.

The flotation, set to be the world’s biggest this year, will value the maker of pesticides and seeds based in Basel, Switzerland, at about $60 billion including debt, or $50 billion without, sources have told Reuters (all figures US$).

The filing means the flotation is likely to take place by the end by 2021, said the sources, who were not authorized to speak to media and declined to be identified.

A secondary listing for Syngenta is also being considered that could take place less than a year after its debut, with exchanges in Zurich, London and New York among the options being examined, the people said.

Proceeds will fund acquisitions, including deals already announced to buy Yangnong Agrochemical and Valagro, the filing said.

Cash raised will also be used on other projects such as advanced agricultural technology research, production expansion, and upgrading and maintaining its facilities.

Funds will also be used to expand further its modern agricultural service platform — which trains farmers in China — and to repay long-term debt, it said.

The Swiss seeds and crop protection giant was bought in 2017 for $43 billion by ChemChina, which was folded into Sinochem Holdings Corp. this year.

The acquisition remains China’s biggest takeover of a foreign company and is aimed at using Syngenta’s top-tier chemicals and patent-protected seeds to drastically improve domestic agricultural output.

Since being taken over, Syngenta has been merged with Israeli agrochemical firm Adama and the fertilizer and seed business of Sinochem.

Syngenta, the world’s No. 1 crop protection maker and No. 3 seed supplier, competes with Germany’s BASF, Bayer and U.S. agrochemicals company Corteva in the speeds and sprays market.

The company employs 49,000 people globally and generated sales of $23.1 billion in 2020. Its biggest markets are the U.S. and Brazil, while it is growing rapidly in China.

Syngenta reported first-quarter sales of $7.1 billion, 20 per cent higher year-on-year, with earnings before interest, tax, depreciation and amortization (EBITDA) rising 19 per cent to $1.5 billion.

Net profit rose 72 per cent in the first quarter, the prospectus said.

— Reporting for Reuters by John Revill in Zurich, Meg Shen in Hong Kong and Dominque Patton in Beijing.

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Vaughan, Ont.-based Recipe Unlimited, owner of fast-casual and dining chains such as Swiss Chalet, The Keg, Harvey’s, St-Hubert and Montana’s, announced Monday it will sell the Milestones chain to Foodtastic, owner of the Second Cup and Nickels Deli brands among others.

“This transaction enables Recipe to further rationalize our portfolio to focus on large brands that generate significant free cash flow and dominate their segment with younger brands that offer attractive opportunities for accelerated new restaurant growth,” Recipe CEO Frank Hennessey said in a release.

“While it is always difficult to depart with valued franchisees and teammates, we feel that Foodtastic is the right parent for Milestones at this stage of its history.”

Sold by Vancouver-based Spectra Group to Recipe (then known as Cara) in 2002, Milestones today has 45 locations — 27 in Ontario, 11 in British Columbia, five in Alberta and one each in Saskatoon and Moncton. The chain’s menu includes various burgers, steaks and pasta dishes and assorted happy-hour fare.

“This acquisition is consistent with our strategy of acquiring quality Canadian brands with growth potential, and we are excited to introduce Milestones to the Quebec market,” Foodtastic CEO Peter Mammas said in the same release.

Montreal-based Foodtastic today has over 370 outlets across 16 brands, mainly in the Quebec market, also including rotisserie chicken chains Au Coq, Fusee and Benny, ice cream chain Chocolato and pizza chains Monza and Bacaro, among others.

The company has made no secret of its plans for aggressive expansion and buying more existing brands. It announced a $50 million equity investment in February for more acquisitions.

Most recently, the company closed its deal in April to buy the Second Cup coffee chain, then announced a deal in May for the Copper Branch chain of vegan restaurants.

Financial terms of the Milestones deal weren’t disclosed Monday, other than that the two companies expect to close the sale within 60 days. — Glacier FarmMedia Network

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