Glencore Eyes More Agriculture Deals After Success of Viterra

Glencore Plc Chairman Tony Hayward said the Swiss miner and commodities trader is seeking more deals in agriculture following the success of the C$6.1 billion ($5 billion) takeover of Viterra Inc. three years ago.

“If we can find the right opportunities to expand the agriculture business, we will,” the former chief executive officer of BP Plc told the FT Commodities Global Summit in Lausanne, Switzerland on Wednesday. The acquisition of Canadian grain handler Viterra, which helped spur an $800 million increase in profit at Glencore’s agricultural division last year, had been “fantastic” for the company, he said.

While Glencore has been expanding in agriculture, it lacks any presence in the U.S., the world’s biggest grain exporter. The U.S. grain-trading sector is already fairly consolidated, but medium-size businesses including Scoular Co., Andersons Inc. and Lansing Trade Group LLC may be targets for Glencore, people familiar with the company’s thinking, who asked not to be named for reasons of confidentiality, said last month. Those companies would add physical assets like grain silos and terminals.

Chief Financial Officer Steve Kalmin highlighted the company’s lofty ambitions in grains last year. He said in December that Glencore, or G, should be added to the crop industry’s ABCD, the informal acronym representing the biggest players in grain trading -- Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc. and Louis Dreyfus Commodities BV.

Lofty Ambitions

Scoular is a more than century-old closely held grain trader based in Nebraska, while Andersons is a $1.1 billion Nasdaq-listed company, based in Ohio and focused on grains, ethanol and plant nutrients. Lansing Trade is a Kansas grain merchant co-owned by Andersons, Australian bank Macquarie Group Ltd. and its employees.

Glencore is one of the world’s two biggest traders of wheat, handling about 18 percent of the global seaborne trade. It’s also among the top three agricultural exporters in Russia, the European Union, Canada and Australia -- all key countries in the global food market.

On top of trading and processing grains, Glencore also farms 180,000 hectares (444,790 acres) of land in eastern Europe, equivalent to about half the size of Rhode Island.

Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director of Glencore.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE