US: Bunge to buy ingredients rival Corn Products
By: just-food.com | 23 June 2008
US-based agribusiness Bunge has struck a deal to buy food ingredients firm Corn Products International for US$4.8bn.
Bunge, which makes fertilizers, oils and grains, said it had secured an agreement to buy Corn Products in a $56-a-share deal.
The move will see Bunge produce finished corn products like starches and sweeteners, including high fructose corn syrup.
Bunge chairman and CEO Alberto Weisser said: "Combining with Corn Products provides a unique opportunity for Bunge to establish an integrated, global presence in the corn value chain, which is highly complementary to our existing operations."
Corn Products shareholders will acquire a 21% stake in Bunge as part of the deal. Sam Scott, chairman, president and CEO of Corn Products, said: "Our stockholders will have an ongoing equity interest in a combined company that is well-positioned to serve customers around the world with a broad product portfolio, integrated distribution network and innovative products."
Bunge flagged the "commercial, geographic and operational opportunities" of the proposed deal.
The company pointed to the growth of the starches and sweeteners market, which is expanding at 5% a year, and an enlarged presence in markets in China, India, Latin America, Asia and Africa.
Bunge also expects to generate annual cost-savings of $100-120m a year in procurement and logistics.
Sectors: Commodities & ingredients
Companies: Bunge
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The move from US agribusiness giant Bunge to buy smaller peer Corn Products International may have got a cool response from the market yesterday (23 June) but the deal will benefit both companies - and give their customers, the global packaged food giants, plenty of food for thought. Dean Best and Katy Humphries report.
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A sad day for TheFoodAnalyst... the other half of his 'Knorr' heritage has now been sold off. Now brace yourself for a quick bit of food industry history...
Some 15 years ago, I used to work for a company called CPC International, created in 1969 from the 1958 merger of Corn Products Refining Company and The Best Foods Inc. In the same year, I believe, co-incidentally the year of my birth, they bought the German Knorr brand. The C.P.C. stood, of course, for Corn Products Company.
The Corn Products Refining Company, originally formed in 1906, had thus diversified out of corn processing into consumer brands (Knorr, Hellmann's and others).
Another piece of trivia: the German Knorr brand, which became American in 1958, is believed by all Swiss and many Germans to be a Swiss brand. The reason for this is that the German factory was bombed during WW2 and for many years thereafter the German market was supplied by the Swiss factory in Thayngen.
Then came the split in 1997 of the B2C and B2B divisions: Bestfoods on one side, Corn Products International on the other. It's funny how food industry M&A fashions repeat themselves!
Anyway, Unilever subsequently bought up Bestfoods a couple of years after that, and thus it 'disappeared' (as did many of its managers!) Now the original corn processing side is about to 'disappear' too...
Apart from feeling a bit like an orphan, I have the problem of not knowing what to put on my CV: CPC International, Bestfoods, Unilever, Corn Products International or Bunge! (Maybe I'll just put Knorr and leave folks to puzzle out the rest)
TheFoodAnalyst.com said at 4:44 pm, June 23, 2008
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