CHICAGO — Archer Daniels Midland Co. has reached an agreement to purchase certain assets of Algar Agro, including two oilseed processing facilities in Brazil.
ADM said the acquisition will enhance its position in the Brazilian meal and bottled oil markets.
“We’ve recently launched our new oilseeds joint venture with Cargill in Egypt, and we have completed several enhancements to our European and North American processing operations,” said Greg Morris, senior vice-president and president of ADM’s Oilseeds business. “With the addition of these new plants in Brazil, we are further enhancing and strengthening our global network at a time when both the near- and long-term outlook for global meal demand continues to be strong. We’re excited about this bolt-on acquisition and about all of the actions we are taking to deliver on our strategic plan to enhance shareholder value.”
Under the terms of the deal, ADM will become owner of integrated crush and oil refining/bottling facilities in Uberlândia in the state of Minas Gerais and Porto Franco in Maranhão. ADM also will gain access to an extensive network of origination and storage silos throughout northeastern and southeastern Brazil.
“Demand for meal and bottled oil in the northeast and southeast regions of Brazil continues to grow, and we are excited to expand our capabilities there,” said Domingo Lastra, ADM’s president, South America. “We’re looking forward to working with the great Algar Agro team, not to mention customers throughout both regions, as we continue to provide the highest quality meal and oils.”
Luiz Alexandre Garcia, chief executive officer of Algar Group, added, “This deal represents an important step toward the implementation of Algar Group´s portfolio and capital allocation strategy. In the Agribusiness sector, we are exiting the soybean crushing and trading segment and focusing on grains production (Algar Farming).”
ADM’s current oilseeds operations in Brazil include soy processing plants in Rondonópolis, Campo Grande, Ipameri, Joaçaba and Uberlândia; a sunflower plant in Campo Novo dos Parecis; biodiesel refineries in Rondonópolis and Joaçaba; and a network of storage facilities with a total capacity of 2.2 million tonnes. The company produces and sells the Concórdia, Corcovado and Vitaliv brands of cooking oils.
The transaction, which requires Brazilian regulatory approval, is expected to close by the end of the year. When the acquisition is complete, Algar Agro’s approximately 400 employees will transfer to ADM.