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Gruma Readies Stake Repurchase From Archer-Daniels-Midland

Gruma (GRUMAB) SAB is moving forward to exercise an option to buy back a 23 percent stake in the world’s largest producer of corn and wheat tortillas from Archer- Daniels-Midland Co. (ADM)

Gruma is holding two meetings with shareholders on Dec. 13 to include in its bylaws a 1996 agreement with the corn processor known as ADM in regards to their stake in the company and to propose increasing the limit of its 2012 buyback program, the San Pedro Garza Garcia, Mexico-based company said in a regulatory filing today.

ADM reached a preliminary agreement on Oct. 22 with Mexican businessman Fernando Chico Pardo to sell its stake in Gruma. The deal was subjected to negotiation of a definitive agreement, approval by ADM’s and Gruma’s boards of directors, the Decatur, Illinois-based company said in a statement last month.

Carlos Hank Gonzalez, a grandson of Roberto Gonzalez Barrera, the chairman of Gruma who died earlier this year, told El Financiero newspaper that the family planned to exercise its rights to acquire the stake.

ADM’s stake in Gruma is worth about $397 million, said a person with knowledge of the deal with Chico Pardo who asked not to be named because the talks are private.

Calls to Chico Pardo’s office and Gruma’s press department were not immediately returned.

ADM has 131 million shares of Gruma, the world’s largest producer of corn and wheat tortillas, according data compiled by Bloomberg.

Shareholders will approve the repurchase, Jose Maria Flores, an analyst at Grupo Financiero Banco Ve Por Mas SA, wrote in an e-mailed report today. “The impact of this news will be neutral,” he wrote.

Gruma fell 0.2 percent to 37.70 pesos on the Mexican Stock Exchange at 12:33 p.m. The shares have gained 39 percent in the past year.

ADM is Gruma’s second-largest stakeholder, according to Bloomberg data. Chico Pardo is the chairman of Grupo Aeroportuario del Sureste SAB, an operator of airports in southern Mexico.

To contact the reporters on this story: Carlos Manuel Rodriguez in Mexico City at carlosmr@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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