ADM to acquire Brazilian oilseed facilities from Algar Agro
August 16, 2018
BY ADM
Archer Daniels Midland Co. announced Aug. 16 that it has reached an agreement to purchase certain assets of Brazil-based Algar Agro, including oilseeds processing facilities in Uberlândia in the state of Minas Gerais, and Porto Franco in Maranhão.
“ADM is already the most diversified oilseeds processor in the world, and now we are once more expanding our capabilities to help meet growing global demand,” said Greg Morris, senior vice president and president of ADM’s oilseeds business. “The acquisition of Algar Agro’s crush and refinery plants in Minas Gerais and Maranhão strengthens our position in key Brazilian demand regions, and continues our strategic global growth. 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. 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.”
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Under the terms of the deal, ADM will become owner of integrated crush and oil refining/bottling facilities in Uberlândia and Porto Franco. ADM will also 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.”
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“This deal represents an important step towards the implementation of Algar Group´s portfolio and capital allocation strategy,” said Luiz Alexandre Garcia, CEO of Algar Group. “In the agribusiness sector, we are exiting the soybean crushing and trading segment and focusing on grains production (Algar Farming). We also are strengthening our position in information and communications technology (Algar Telecom and Algar Tech), tourism and entertainment (Rio Quente Resorts and Costa do Sauipe) and renewable energy sectors (Alsol). We firmly believe that ADM was the best partner to engage with and execute this transaction, given the long term relationship we have with ADM and its distinctive capabilities and leadership in the Agribusiness sector.”
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 metric tons. The company produces and sells the Concórdia, Corcovado and Vitaliv brands of cooking oils.
The deal, which requires Brazilian regulatory approval, is expected to close by the end of the year. When the transaction is complete, Algar Agro’s approximately 400 employees will transfer to ADM.
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