Aug. 5 (Bloomberg) -- Cargill Inc., an agricultural commodities trader, agreed to buy Glencore Xstrata Plc’s Joe White Maltings for about A$420 million ($374 million), according to two people familiar with the matter.
Glencore is selling the unit because malting isn’t a major business for the company, one of the people said, asking not to be identified as the details are private. Glencore bought the malting operation as part of a C$6.1 billion ($5.9 billion) purchase of Canada’s Viterra Inc. last year.
The acquisition should be completed before the year-end subject to regulatory approvals, Minneapolis-based Cargill said today in a statement. The sale will give the largest closely held U.S. company control of Australia’s biggest maltster. Cargill didn’t disclose the value of the deal in its statement.
Joe White Maltings makes more than 550,000 metric tons of malt a year and supplies brewers in Singapore, Japan, Thailand, Vietnam, South Korea and Indonesia, according to its website.
Rising demand from Asia is helping to spur acquisitions in Australian agriculture. Archer-Daniels-Midland Co. agreed to buy the nation’s GrainCorp. Ltd. in a A$2.2 billion deal in May to add ports that ship grain in bulk from the east coast.
“The addition of Joe White Maltings will complete Cargill’s global footprint in all key barley production areas and enable us to better serve our global and leading regional brewers in the region,” Doug Eden, president of Cargill’s global malt business, said in the statement.
Glencore rose 0.9 percent to 290.40 pence by 10:29 a.m. in London trading, paring its loss for the year to 17 percent.
Malt, a form of barley, is used to brew alcoholic drinks such as beer and whiskey. Australia makes up about 32 percent of the malting barley trade, according to Barley Australia. It produces more than 850,000 tons of malt a year, with in excess of 500,000 tons exported, according to the group’s website.
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