TOKYO, JAPAN — Marubeni Corp., a Japanese trading company that last year agreed to acquire Omaha, Nebraska, U.S.-based Gavilon Holdings L.L.C. for $3.6 billion, has amended its agreement and now will pay $2.6 billion for the company — minus the energy business.
Marubeni did not say why it dropped the energy unit or how the revised agreement affects debt levels the Japanese company will assume.
Energy is the smallest of Gavilon’s businesses. The energy unit trades crude oil, natural gas and fuels. The business operates storage capacity for 8 million barrels of crude, 10 billion cubic feet of gas and 500,000 barrels of refined oil products.
Marubeni’s grain business operates as part of its Food Materials Division. The division is the top trader among general trading companies with annual grain trading volume of about 20 million tons, Marubeni said, and the company is bolstering efforts to develop sales operations worldwide, along with measures targeting grain production markets. Additionally, the company has a framework for grain procurement composed of diverse production sites worldwide, and it is developing global sales operations. Leveraging internationally competitive grains, the division not only provides Japan with a stable grain supply, but also is building a structure for flexibly supplying grain to meet growing global demand.
Privately-held Gavilon LLC, one of the largest grain, processing and merchandising companies in the U.S., was established in 2008 with the sale by ConAgra Foods Inc. of its Trading and Merchandising business to Ospraie Management LLC Special Opportunities Fund in a $2.1 billion transaction. With the sale, the business was renamed Gavilon LLC Ospraie remains the principal owner of the business.
Since it became a privately-held company, Gavilon has grown rapidly with a number of significant actions, including acquisitions and capital expenditures. Gavilon operates 300 facilities and regional offices worldwide. The company estimated its business mix, as measured as share of earnings, at 62% grain and ingredients (mostly origination, storage and distribution), 20% energy (storage, transportation and logistics) and 18% fertilizer (distribution).
According to the 2012 Grain & Milling Annual, Gavilon was the third largest grain storage company in the U.S.
Marubeni in April received Chinese antitrust approval for the purchase of Gavilon, and iterated in a June 10 statement that it is in the process of fulfilling conditions that came with the approval to close the deal.
Sign up for our free newsletters From daily reports on breaking news to weekly updates, World Grain has the grain, flour and feed industries covered. |
Subscribe |