Billionaire Louis-Dreyfus Tightens Grip on Global Trading HouseAndy Hoffman
Billionaire Margarita Louis-Dreyfus increased her control over Louis Dreyfus Holding BV, the parent company of the world’s largest trader of rice and raw cotton.
The Akira Foundation, her family trust, raised its stake to 80 percent from 65 percent, she said Thursday at a press briefing in Paris. She expects the deal to close in June.
Louis Dreyfus Holding controls about 85 percent of Louis Dreyfus Commodities BV, which accounts for about 10 percent of global agricultural commodity flows and operates in more than 100 countries. The trading firm, which also runs a hedge fund, reported flat annual profit on Thursday after commodity inventories approached record highs, pushing prices down.
Akira doesn’t need to buy more shares because it now has a “super majority,” an aim of Margarita Louis-Dreyfus since 2009, she said. Some or all of the remaining shares in the parent company may be sold in the future to a strategic investor or as part of an initial public offering, according to the billionaire. “We are keeping options open,” she said.
Net income at Louis Dreyfus Commodities climbed to $648 million last year from $640 million in 2013, the Rotterdam-based company said in its annual financial report. Sales increased 1.7 percent to $64.7 billion.
Inventories of most of the commodities traded by the firm, with the exception of coffee, surged during the year as production rose. The resulting decline in prices and volatility hurt trading operations, while processing of oilseeds, cotton, orange juice and wheat buoyed results.
Shipped sales volumes grew 4 percent to 80 million metric tons, the company said. Pretax profit increased 10 percent to $837 million.
Claude Ehlinger, deputy chief executive officer and chief financial officer, is overseeing operations at the 164-year-old company after it dropped plans to appoint former Viterra Inc. head Mayo Schmidt as CEO in December. Louis-Dreyfus said she hopes the firm will find a new chief by the end of the year.
“Generally, emotionally, it will make it difficult for an outsider,” she said. “Our company is really special and we don’t want to jeopardize that if we see small alignments that are not within our culture.”
The company hired three new directors for its supervisory board last year, including Michel Demare, non-executive chairman of Syngenta AG.
Capital expenditure was $592 million last year. The company plans to spend about $4 billion to double its holdings of physical assets by 2019. It may have opportunities in Russia and Ukraine, where its operations have been largely unaffected by the crisis, Ehlinger said at the briefing.
The company paid a special one-time dividend of about $300 million related to the sale of a palm-oil plantation, Executive Chairman Serge Schoen told reporters. Louis Dreyfus Commodities also paid a normal dividend of about the same amount.