Monday, April 22, 2019

Major merger as Gleadell Agriculture is acquired by multinational trader

February 6, 2019 by  
Filed under News & Business

Multinational commodity trader Archer Daniels Midland has signed an agreement to purchase Gleadell Agriculture – including its wholly owned subsidiary Dunns (Long Sutton) Ltd.

Unveiled last month, the deal will see Gleadell Agriculture and Dunns combined to create a new entity known as ADM Agriculture. ADM said the move would further increase its processing capabilities, widen its UK footprint and strengthen ADM’s presence nationally.

Subject to regulatory review, Gleadell and Dunns will be merged with the marketing business ADM Arkady and the specialist combinable crop origination business ADM Direct. ADM already owns 50% of Gleadell Agriculture. The other 50% is currently owned by InVivo.

The takeover will increase ADM’s origination, storage and destination marketing capabilities in the UK. The company, which is listed on the New York Stock Exchange, said it would be able to serve as the trading partner of choice for even more farmers and customers.

Significant storage

“With significant storage and processing capability and a longstanding reputation for being a safe and trusted trading partner, Gleadell and Dunns will be great additions to our business in the UK,” said Gary McGuigan, ADM’s president of global trade.

He added: “We are excited to expand our capabilities, not only to continue our strategic growth, but also to support our farmers and our customers as they work to address fast-growing consumer demand.”

Commenting on the merger, NFU combinable crops board chairman Tom Bradshaw said: “The UK grain market is fiercely competitive and the arable sector is facing many commercial challenges, so it isn’t surprising to see this kind of consolidation in the grain supply chain.

“The NFU is concerned that this merger could add extra financial pressure on arable businesses as it would massively reduce farmers’ options within the grain market, driving down competitive trading and reducing farmers’ chances to find the best price for their product.

UK suppliers

“Although it is encouraging that international businesses are investing in the UK grain industry, the [government] must protect British farming businesses from dominant supply chains or else it runs the risk of favouring cheaper, lower quality imported grain over home-grown crops.”

Established in 1880, Gleadell Agriculture is a leading supplier of combinable crops to UK millers, feed compounders and other consumers, and a major exporter of grains, oilseeds and pulses to EU markets and further afield.

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