(Bloomberg) -- The deal announced Monday by Cargill Inc. and Continental Grain Co. to acquire chicken producer Sanderson Farms Inc. unites two of the oldest names in commodity trading and marks the biggest acquisition for either family-controlled firm.
Cargill and Continental agreed to buy Sanderson for $4.53 billion in cash. Assuming the acquiring joint venture is 50-50, the deal is larger than Cargill's 1.5 billion-euro ($1.8 billion) purchase of animal nutrition company Provimi SA in 2011, according to data compiled by Bloomberg. It's also easily Continental's biggest takeover, the data also show.
Cargill is 156 years old and its still owned by descendants of William Wallace Cargill, who founded the company in the U.S. Midwest. It has 14 billionaires among its shareholders.
The firm is still a major power in the world of commodity trading -- it's the “C” in the ABCDs, the acronym for the quarter of giant agricultural merchants that also includes Archer-Daniels-Midland Co., Bunge Ltd. and Louis Dreyfus Co. But Cargill is also diversified and is a producer, not just of poultry and meat, but of food ingredients and animal feed as well.
Cargill's Biggest Takeovers | ||||||||||||
| Target | Price | Date | ||||||||||
| Sanderson Farms | $2,266* | 2021 | ||||||||||
| EWOS Holding | $1,588 | 2015 | ||||||||||
| ADM's chocolate business | $440 | 2015 | ||||||||||
| Provimi | $1,764 | 2011 | ||||||||||
| AWB | $677 | 2011 | ||||||||||
| Evonik food ingredients ops | $635 | 2006 | ||||||||||
| Cerestar | $891 | 2002 | ||||||||||
| Agribrands International | $535 | 2001 | ||||||||||
| Source: Bloomberg. Prices based on closing equity value of deals. *Calculated based on Cargill-Continental buying Sanderson via a 50-50- joint venture. | ||||||||||||
Continental is another storied -- albeit much lower-profile -- name in the agricultural trading world. Its run by Chief Executive Officer Paul Fribourg, a sixth-generation descendant of Simon Fribourg, who founded the company in the French town of Arlon (now a part of Belgium) in 1813. Once a major player in grains trading, Continental sold that part of its business to Cargill in 1999.
Crop Giant Cargill Reports Biggest Profit in 156-Year History
“We are very happy to partner with Cargill with whom we have had a very long relationship between two family-owned companies for decades,” Continental said in a statement.
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