Japan Marubeni selling US Gavilon’s grain business to Viterra Limited

Mark Milam

26-Jan-2022

HOUSTON (ICIS)–Japan trading firm Marubeni Corporation announced it will sell the grain business of Gavilon Agriculture Investment (Gavilon) to Viterra Limited following a reorganisation of Gavilon’s structure for $1.125bn, plus working capital.

Currently, Gavilon is a subsidiary of Marubeni America Corporation (MAC), a 100% subsidiary of Marubeni. Based in Omaha, Nebraska, its main businesses are the handling of grain and ingredients and fertilizer wholesaling, and was acquired in 2013 for $2.7bn.

The transfer is subject to closing conditions and the required regulatory approvals and is expected to close in the second half of 2022.

In a statement, Viterra said Gavilon’s leading asset network is in key growing areas across the US, with access to major railroads, rivers and ports.

It also has international operations in Mexico, South America, Europe and Asia, along with an indirect minority ownership interest in two port terminals located in Kalama, Washington, and Portland, Oregon.

“The addition of Gavilon supports our long-term strategy of significantly increasing our presence in the United States, one of the major producing and exporting regions, which will further strengthen our global network,” said David Mattiske, Viterra Limited CEO.

“The combination of the Gavilon and Viterra origination businesses will enable us to provide more value and flexibility to our customers. We will be able to rapidly enhance our sustainable supply chains, provide higher levels of quality control and reliability, while creating exciting opportunities for our customers and employees.”

In a statement, Marubeni said during re-evaluations of its grain business strategies and goals, it deliberated on the significance of holding on to Gavilon’s grain business.

Under the circumstances of the uptrend in the grain supply industry, it said the company recognised an opportunity to transfer Gavilon’s grain business on appropriate terms.

Under the terms, Marubeni will transfer the shares of Gavilon to Viterra following the conclusion of an internal business reorganisation and after it transfers grain elevators held and operated by Gavilon in the northern US to Columbia Grain International (CGI), a subsidiary of Marubeni.

It will also transfer part of the equity interest of a joint venture grain export terminal business in the US held by Gavilon to CGI.

Finally, as part of the transaction, Gavilon’s fertilizer business will be transferred to MAC as the company said it aims to further strengthen their fertilizer presence within the domestic marketplace.

Under this strategy, the company said Gavilon’s fertilizer business and Helena AgriEnterprises, a subsidiary of Marubeni that operates the agri-input retail business, will individually strive to expand the amount of volumes sold and their sales regions.

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