Bloomberg News

Marubeni Wins China Approval for $3.6 Billion Gavilon Takeover

April 23, 2013

Marubeni Corp. (8002) won approval from Chinese antitrust authorities for its $3.6 billion purchase of U.S. grain supplier Gavilon Group LLC, the Japanese commodities trader’s biggest acquisition.

The approval, coming almost a year after Marubeni said that it agreed on the purchase, was posted yesterday on the website of China’s Ministry of Commerce. The go-ahead was only given on the basis that Marubeni and Gavilon continue to operate separate soybean sales units in China so as not to limit competition, the ministry said.

Buying Omaha, Nebraska-based Gavilon allows Japan’s biggest agricultural trader to expand in the world’s largest producer and exporter of corn and compete with Cargill Inc. and other top global grain traders. The acquisition also strengthens Marubeni’s position in supplying food to Asia, as U.S. grain is one of the main import sources for the region.

The delay in the decision came after China, the world’s largest buyer of soybeans and metals, took longer than anticipated to approve Glencore International Plc’s takeovers of Xstrata Plc and Viterra Inc. At the time when Marubeni announced its purchase of Gavilon on May 29 it said the deal for the third-largest U.S. grain merchandiser was due to close in September.

The purchase of Gavilon from a group of funds led by Ospraie Management LLC also involves Marubeni taking on $2 billion of debt, the Tokyo-based company’s Chief Financial Officer Yukihiko Matsumura said in May.

Gavilon traces its roots back to Peavey Co., acquired by ConAgra Foods Inc. (CAG:US) in 1982. Gavilon took its current form when ConAgra sold its trading and merchandising operations in 2008 to Ospraie, a commodities hedge-fund firm founded by Dwight Anderson, and its partners for $2.75 billion including debt.

In addition to selling grains, Gavilon’s businesses include fertilizer distribution and energy trading. It has about 2,000 employees in 300 locations on six continents, it said in March last year.

To contact the reporter on this story: Yuriy Humber in Tokyo at yhumber@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net


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