2012-06-22 15:07:38 - Marubeni Corp to buy US grains merchant Gavilon
Marubeni Corp, the Japanese trading house, is to buy US grains merchant Gavilon for $3.6 billion, the company said on Tuesday, deepening its control of grain supplies from North America, the world´s top export hub.Japan´s trading houses, or "sogo shosha," have been scooping up assets around the world, targeting everything from shale gas to copper, as the world´s third-largest economy competes with China, the second-biggest, for resources.Marubeni, Japan´s fifth-largest trading company, had been in advanced talks to buy Gavilon since early May, in what would be the largest transaction in Marubeni´s history.The US grain trader has about $2 billion in debt, Marubeni said, which would take the total value of the transaction, which is to be partly financed by bank
borrowing, to $5.6 billion.Gavilon is the third-biggest US grain merchant in terms of the size of its marketing network, behind Archer Daniels and Cargill, and also has large energy and fertiliser trading assets. Gavilon now has about 320 million bushels of storage in the US putting it ahead of global grain giants Bunge Ltd and Louis Dreyfus.Gavilon President and Chief Executive Officer Greg Heckman, said, "As part of a larger trading organisation, Gavilon will be well-positioned to more efficiently connect supply with growing global demand." The combination between Marubeni and Gavilon is seen as a good commercial fit, marrying Gavilon´s presence in the US Central Plains and Midwest with Marubeni´s operations in the Pacific Northwest, the shortest US sea route to Asia.Follow us on Twitter @CandMResearch
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