Cargill no longer pursuing Nutreco, SHV offer only one on table

Cargill has dropped out of the race for Dutch animal and fish feed group, Nutreco

Last night the Minneapolis headquartered company said it would no longer pursue the acquisition. 

“In reaching this decision, Cargill considered all relevant facts, including the attractiveness of acquiring Nutreco relative to alternative potential investments,” said the agribusiness giant, adding that it remains committed to building further its global animal nutrition platform through both organic investment and acquisitions. 

Nutreco shares dipped 4.9% to €44.20 ($54) in early trading this morning.

On December 11, Cargill had revealed it was hoping to acquire the animal nutrition and fish feed group in its entirety, having previously indicated it wanted to break-up the company in a joint bid with private equity player, Permira. 

Nutreco said it “took notice of the statement” released by Cargill yesterday. 

Counter bid ‘unlikely’ at this stage

Mark Woldberg, a spokesperson for the Netherlands based animal feed group, told us while it may be unlikely another player would make a bid for Nutreco at this juncture, such a development could still not be completely ruled out.

“The reality is that SHV has been the only company that has made an offer so far,” he said. 

Any counter bid must come in at least 8% higher than the €44.50 ($54) per share offer from SHV, a stipulation the Dutch investment firm secured when finalizing its offer earlier this month.

But Rabobank analysts, in a commentary this morning on the withdrawal of Cargill from the race, were quick to dismiss the idea of there being additional offers for the Amersfoort based company.

No competition concerns

Nutreco published its agenda yesterday for its AGM on 9 February 2015, whereby the recommended offer from SHV will be debated by shareholders.

And, the EU Commission, under EU merger regulation, has released its findings that an acquisition of the Dutch feed group by SHV would raise no competition concerns.

Such a conclusion was widely expected as there are no synergies between the businesses.

“The activities of SHV and Nutreco do not overlap,” concluded the regulator. SHV operates worldwide in energy distribution, cash-and-carry wholesale, heavy lifting and transport activities, mechanical engineering and industrial services, oil and gas, and private equity.

For Farmers transfers unit to Nutreco

In other developments, ForFarmers has struck a deal with its Dutch feed competitor whereby Nutreco will take on its international young animal feed export business, from the UK to a number of European countries, from January next.

“This transfer has no impact on the ForFarmers young animal feed business in the four key countries of operation - the Netherlands, UK, Germany and Belgium.

These changes do affect a number of BOCM PAULS international staff and wherever possible they are being placed in alternative roles within the ForFarmers organization,” said the Lochem headquartered company.

ForFarmers said BOCM PAULS international brands will be licensed to Nutreco for a period of time, noting that the export business being transferred has a sales turnover of €8.5 million.

Yoram Knoop, CEO of ForFarmers, commented on the move:

“Following the recent announcement regarding the renewal of the existing strategic partnership between ForFarmers and Nutreco, we have been reviewing the combined strengths of each business and have concluded that our international markets for young animal feed are best served in the longer term by utilizing the strengths of Nutreco.

Our distributors and customers should see very little change as a result of the transfer, other than, in time, production is likely to be transferred to specialist production plants in Europe where the local needs for each country may be better served.

Nutreco is committed to the development and innovation of young animal feed and is investing significantly in resources to support this activity."