United Malt Group, whose Canadian assets operate under the Canada Malting banner, last month locked in on a previously announced deal to sell itself to France’s Malteries Soufflet for A$1.5 billion (C$1.3 billion).

Sydney, Australia-based United Malt and Soufflet reported Aug. 7 they now have written confirmation from Canada’s Commissioner of Competition that the office “does not intend to make an application” to challenge the transaction.

Thus, United Malt said, the condition for Canadian regulatory approval “will be satisfied” if the commissioner’s notice isn’t reversed by Aug. 23.

United Malt reported separately Monday that it and Soufflet now also have confirmation from the United Kingdom’s Competition and Markets Authority (CMA) that the CMA has “no further questions in respect of the proposed transaction.”

Much like the “no-action letter” Canadian regulators provide in such cases, “no further questions” is the CMA’s standard response when the authority doesn’t intent to mount a public inquiry into the deal, United Malt said.

The world’s fourth largest commercial maltster, United Malt makes bulk malt for brewers, craft brewers, distillers and food companies and has 12 processing plants in Canada, the U.S., Australia and the U.K., with combined malting capacity of about 1.26 million tonnes. It had been owned by Australia’s GrainCorp since 2009 and was spun off in 2020.

United Malt’s Calgary-based Canada Malting unit, which alone produces about 400,000 tonnes of malt per year, includes malting plants at Calgary, Montreal and Thunder Bay, nine country elevators in the Prairie provinces, and Country Malt facilities at Delta, B.C., Brampton and Calgary.

Soufflet, which has 28 malt houses in Europe, Asia, Africa and Latin America with combined production capacity of 2.36 million tonnes per year, has been an arm of French agribusiness InVivo since last year. InVivo has previously said it plans to be the world’s top malt firm within five years. — Glacier FarmMedia Network

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Anglia Maltings operates seven malt facilities in the U.K., Poland, and Germany, with combined production capacity of 440,000 metric tonnes.

Privately-owned Richardson, which has operated since 1857, has been interested for 20 years in entering the malting business, but never found the right opportunity until now, CEO Curt Vossen said.

The deal fits Richardson’s strategy of processing the crops it buys from farmers, ranging from canola crushing and canola oil bottling to milling durum and oats, Vossen said.

“Now that we’re a food processor as well as an agricultural company, malting serves a fundamental purpose, it’s a natural fit,” he said in an interview.

Vossen said Richardson will buy European barley for its malting facilities.

He said Richardson will take time to understand the specifics of malting before deciding whether to expand the business.

The deal follows an announcement last week by French agribusiness InVivo of an agreement to acquire Australia-based United Malt in a $1 billion deal to create the world’s largest malt producer.

That deal, to be handled through InVivo’s Malteries Soufflet arm, was first proposed in March but now has approval from United Malt’s board of directors. Approvals from United Malt shareholders and regulators are still pending.

Among United Malt’s other assets in the U.S., Australia and the U.K., that deal would give Soufflet control of Calgary-based Canada Malting, which alone produces about 400,000 tonnes of malt per year.

Winnipeg-based Richardson, which employs over 3,000 people worldwide, handles and processes grain and oilseed crops. In 2021, it acquired Italgrani USA, North America’s largest durum wheat miller.

— Reporting for Reuters by Gus Trompiz in Paris and Rod Nickel in Winnipeg.

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The A$5 per share offer represents a 45.3 per cent premium to United Malt’s last close of A$3.44. Trading in shares of the company was halted on Monday.

InVivo, which acquired agribusiness peer Soufflet last year, has said it aims to become the world’s top malt producer within five years through external growth.

Earlier this year, it signed an agreement to take over Belgian malthouse Castle Malting, one of the oldest producers of the beer ingredient in the world.

Malteries Soufflet is the largest commercial maltster in Europe and the second largest globally.

United Malt disclosed it first received an offer of A$4.15 per share in December, followed by several others from the French firm. The latest proposal was made on March 14.

The company has granted Soufflet exclusive access to conduct a due diligence.

United Malt is the world’s fourth largest commercial maltster, producing bulk malt for brewers, craft brewers, distillers and food companies. The company has processing plants in Canada, the U.S., Australia and the United Kingdom.

United Malt’s Canadian assets are under the purview of Calgary-based Canada Malting, which produces about 400,000 tonnes of malt per year.

Canada Malting’s business includes malting plants at Calgary, Montreal and Thunder Bay, nine country elevators across the three Prairie provinces, and Country Malt facilities at Delta, B.C., Brampton and Calgary. The Country Malt packaging plant in Calgary was set up at the Canada Malting plant site in 2019.

United Malt was acquired by Australia’s GrainCorp in 2009 and spun off in 2020. GrainCorp retains an 8.5 per cent stake in the firm, while investment firm Tanarra Capital is United Malt’s largest shareholder.

Neither of the companies immediately responded to Reuters requests for comment on the offer.

— Reporting for Reuters by Harish Sridharan in Bangalore.

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