ADM makes takeover bid for competitor Bunge

Grain Central January 22, 2018

SHARE prices have reacted favourably to newsire reports on Friday in the US that global agribusiness Archer Daniels Midland Company (ADM) has made a takeover approach to competitor Bunge Ltd.

Bunge Western Australia receival site

In trading on the New York Stock Exchange late Friday, Bunge’s share value closed 11 per cent higher than previous day, while ADM closed up 1pc (NYSE:ADM and NYSE:BG)

ADM has a market capitalisation of around US$23 billion, compared with Bunge’s at around $11b.

Speculation during 2016 and 2017 about rival commodity trader Glencore having aspirations towards Bunge resulted in neither merger nor acquisition, but led to a standstill agreement in October 2017.

That agreement, preventing a hostile bid, was soon to expire.

The 2017 speculation also led to Bunge putting in place improved compensation packages for top executives in the event of company takeover.

In Australia

Both companies procure and export grains from Australia, linked with offices in southeast Asia to suit Asian time-zone trade.

Bunge built a port terminal at Bunbury in Western Australia, and has investments in grain-receival facilities at Kukerin and Arthur River.

It trades grain also in South Australia and the eastern states, and is headquartered in Melbourne.

ADM originates grains, oilseeds and pulses, and its Australian head office is in Adelaide.

ADM has a food ingredients division based in Sydney, and distributes nationally.


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