U.S. grain firm The Andersons, the owner of Thompsons since January, announced Tuesday in its second-quarter report it plans to sell Thompsons’ “agronomy assets” to Burlington, Ont.-based Sylvite Holdings.

Financial terms of the sale, which The Andersons expects to close next month, weren’t released in Tuesday’s report, nor were any details about the exact assets going to Sylvite in the deal.

Ohio-based Andersons said Tuesday it will continue to own and operate Thompsons’ grain storage and food processing facilities in Ontario.

Sylvite, which began in 1977 as Sylvite Sales, a fertilizer supplier dealing mainly in potash, today bills itself as the largest independent agricultural wholesaler in Eastern Canada, with a “specialty presence” in the southeastern U.S.

The company’s business also includes Sylvite Agri-Services, which sells retail fertilizer, seed and crop inputs at five locations in southwestern Ontario. It also offers crop advisory services, grain handling and, in partnership with Thompsons, grain marketing.

Thompsons’ agronomy business includes crop advisory services as well as retail inputs, custom application, precision ag and equipment rentals, though The Andersons didn’t specify Tuesday which of those operations are to go to Sylvite.

The Andersons has been sole owner of Thompsons since it closed a deal in January for Kansas-based Lansing Trade Group, with which it had co-owned Thompsons in a 50-50 joint venture since 2013.

The Andersons on Tuesday booked $29.88 million in net income attributable to the company on $2.33 billion in sales and merchandising revenues for the quarter ending June 30, up from $21.53 million on $911 million for the year-earlier period (all figures US$).

“Extremely wet weather in many of our core grain origination markets benefited our trade group but hurt both our ethanol and plant nutrient groups during the quarter,” Andersons CEO Pat Bowe said in the company’s release.

“We were able to capitalize on merchandising opportunities caused by grain and feed ingredient price volatility. However, we’re concerned about the implications of a smaller corn crop on the utilization of our eastern grain assets for the remainder of this year and into 2020.” — Glacier FarmMedia Network

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Ohio-based grain handling and processing firm The Andersons, Inc. announced Monday it has signed a deal with Lansing Trade Group (LTG) for the remaining 67.5 per cent of LTG it doesn’t already own.

The Andersons has held a minority equity stake in Kansas-based LTG since 2003 — 15 per cent at first, gradually increasing to 49 per cent by 2008 and later pared back to its current level.

The cash-and-stock acquisition, valued at about $305 million, will give LTG shareholders about $175 million in cash and about $130 million in unregistered Andersons shares (all figures US$).

The deal will also “result in the consolidation” of Thompsons, which LTG and The Andersons bought jointly in 2013, each holding a 50 per cent stake in the joint venture.

Blenheim, Ont.-based Thompsons, a grain and food-grade bean handler and crop input provider, has 12 facilities in Ontario and Minnesota.

Andersons CEO Pat Bowe said in a release Monday a merger with LTG will create “a grain business of highly complementary assets with greater scale that significantly expands our reach in the agricultural marketplace.”

The deal calls for LTG’s business to be “integrated” with that of The Andersons’ grain group, and the merged business to be jointly led by Andersons’ grain group president Corey Jorgenson and LTG CEO Bill Krueger.

The Andersons has been weighed down in the past few years by the same market pressures burdening U.S. agrifood firms such as Bunge, ADM and Cargill, which have faced both low grain prices and limited price volatility.

In its 2017 annual report, it noted its grain group “recovered nicely from a tough 2016” while its other business groups, including ethanol, plant nutrients and rail equipment leasing, faced “significant market challenges.” In early 2017 The Andersons also folded its retail business, affecting over 1,000 employees.

The Andersons in fiscal 2017 booked $42.5 million in net income attributable to the company on $3.69 billion in sales and merchandising revenues, up from $11.6 million on $3.9 billion in 2016.

The Andersons said Monday it expects a deal for LTG to accrue to EPS (earnings per share) within the first full year after the deal’s closing, which is expected before the end of January, pending the usual regulatory and shareholder approvals.

It said it also expects the merged business to chalk up annual run rate cost synergies of at least $10 million by year-end in 2020.

Jorgenson, in Monday’s release, said the merger is expected to speed up The Andersons’ plans to “grow income from originations and managing grain assets, expand trading and risk management services, and broaden our food ingredients and specialty grains and feed ingredients platform.”

Privately-held LTG’s Canadian holdings also include a stake of about 38 per cent in Alberta-based grain handler Providence Grain Group. Lansing’s grain trading desks on the Prairies and at Chatham, Ont. now operate under the Providence and Thompsons banners respectively.

LTG further built up its space in Canadian grain merchandising in 2012 in a Hamilton-based joint venture with Singapore’s Olam International, which at the end of 2013 sold its stake in that operation back to Lansing for $5.4 million.

LTG’s businesses, apart from grain and oilseed trading, include trading of feed ingredients such as distillers grains, wheat middlings, protein meals and cottonseed and merchandising of energy products including ethanol, natural gas liquids and frac sand. — Glacier FarmMedia Network

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The company, which buys grain, produces ethanol and leases rail cars, said it will shut its four retail stores in the second quarter of 2017, affecting 650 employees in the Toledo area and 400 in Columbus.

“Choosing to cease a business that has spanned 65 years and employs about 1,050 people is tremendously difficult,” CEO Pat Bowe said in a statement.

The closure will have no impact on the company’s grain, ethanol, plant nutrient and rail operations and the full financial impact has not been determined, Andersons said.

However, the company said it expects to record a pre-tax charge in the range of US$9-$14 million in the first half of 2017.

There has been a sharp downturn in the U.S. farm sector with farmers finding it tough to make money due to weak prices for conventional grains because of a global supply glut.

“Net farm income is down 46 per cent from just three years ago, constituting the largest three-year drop since the start of the Great Depression,” agricultural trade groups said on Tuesday in a letter to U.S. President-elect Donald Trump.

In June last year, the Ohio-based company rejected a US$1 billion takeover offer from HC2 Holdings Inc., calling the bid an attempt to capitalize on a sharp downturn in the agricultural economy.

— Reporting for Reuters by Vishal Sridhar in Bangalore.

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HC2, a holding company run by former hedge fund manager Philip Falcone, said it would pay $1.15 billion for Andersons’ grain, rail and ethanol operations in its latest attempt to take control of the company (all figures US$).

The firm adjusted its offer to “include the interest in the ethanol assets by yet another strategic partner,” after bidding $950 million just for Andersons’ grain and rail businesses last month, according to a letter Falcone sent to the agricultural company.

Falcone restated an offer to acquire all of Andersons for $37 per share in cash, or about $1 billion, plus the assumption of $402 million in debt.

An Andersons spokeswoman did not immediately respond to a request Thursday for comment, but the company on Friday released a copy of a letter it sent Thursday to Falcone, acknowledging receipt of his latest proposal.

The Andersons, in its response to Falcone, said his new proposal “restates your previously rejected offer” but “now further propose(s) to break up the company by acquiring the grain, rail and ethanol businesses.”

The Andersons said its board “will carefully consider your letter and your latest proposal and evaluate whether that proposal is in the best interests of the company and its shareholders.”

Grain companies, including Andersons’ larger rivals Archer Daniels Midland and Bunge, have suffered financially as a global grain glut has depressed crop prices and encouraged farmers to keep their harvests in storage, rather than sell them to merchants.

Andersons in May rejected HC2’s $1 billion takeover offer as too low, calling it an attempt to capitalize on the downturn in the agricultural economy.

Andersons’ stock price has jumped 40 per cent since HC2 first publicized its interest in the company on May 17 but is down 28 per cent from two years ago.

On Tuesday, Andersons said in an investor presentation that HC2’s proposal to acquire the grain and rail businesses was a “non-starter” because the company’s units benefit one another. The remaining businesses would be “incomplete, incongruous and unattractive,” according to a copy filed with U.S. securities regulators.

HC2 said the presentation represented “the same tired pitch about how the company now plans to reduce costs and bring in new leadership with fresh perspectives, and how the portfolio of companies are somehow complementary.”

Last month, HC2 said it would make stalking horse bids for each of the Andersons’ assets outside of grain and rail. A stalking horse bid is used as a starting bid or minimally accepted offer that other interested bidders must surpass if they want to buy a company.

— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Includes files from AGCanada.com Network staff.

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Andersons is not looking to be acquired, the company’s new CEO told Reuters a day earlier.

“As a public company, we like where we’re at,” Patrick Bowe said in an interview. A spokeswoman for Andersons did not immediately respond to a request for comment on Tuesday.

HC2’s offer of $37 per share represents a 42 per cent premium to Andersons’ closing price on Tuesday (all figures US$). HC2, a diversified holding company, said it would also assume $402 million of Andersons’ debt.

Analysts have long considered the company, which has a market value of about $748 million, to be a prime takeover target in the farm sector because of its medium size and diversified assets, including grain storage facilities and rail cars.

HC2 has repeatedly expressed interest in a “negotiated transaction” to Andersons’ board since January, HC2 said in a letter to the agribusiness.

At a meeting last month, Andersons said HC2’s offer was too low without giving any “indication of an acceptable price or a justification for a higher price,” according to the letter.

Andersons has been “poorly managed,” HC2 said, citing weak earnings and a $100 million budget for a new corporate headquarters.

Bowe, 57, became Andersons’ CEO and president in November after a career at global commodities trader Cargill Inc .

Under the previous CEO, Andersons began building a new 138,000 square-foot headquarters near its current home base in Maumee, Ohio, which it leases.

Jim Burmeister, treasurer of Andersons, declined to reveal the cost of the new headquarters to Reuters on Monday.

HC2, which holds a stake in Andersons, said as an alternative to acquiring the entire company it was willing to buy the company’s grain and rail businesses for $950 million. In addition, it would also make stalking horse bids for each of the company’s remaining assets, HC2 said.

A “stalking horse” bid is used as a starting bid or minimally accepted offer that other interested bidders must surpass if they want to buy the company.

— Reporting for Reuters by Tom Polansek in Chicago and Vishaka George in Bangalore.

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Richardson, one of Canada’s largest grain handlers, last week said it was interested in Andersons as part of a push to expand in the U.S.

“Our strategy does not include selling today,” Anderson, the grandson of the company’s founders, said in an interview.

Analysts have long considered Andersons, which has a US$1.2 billion market value, to be a prime takeover target in the farm sector because of its diversified assets, including grain storage facilities and rail cars.

At a BMO Capital Markets investor conference in New York, Anderson said the company ranked eighth in U.S. storage capacity for grain. Archer Daniels Midland, Marubeni’s Gavilon and Cargill held the top spots.

“Our primary intent, at this time, is that we believe we have a wonderful future for decades as an independent company,” Anderson said. “That doesn’t mean that somebody else wouldn’t say that they’d be interested in buying us.”

— Reporting for Reuters by Tom Polansek.

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Richardson, which now owns two U.S. mills, is interested in Andersons Inc. and private companies Bartlett and Scoular, as well as co-operatives, CEO Curt Vossen said in an interview at the company’s Winnipeg head office.

Andersons’ shares on Nasdaq spiked as much as 13 per cent shortly after Vossen’s comments were published, touching a three-month high.

Vossen said Richardson has had no discussions with those companies and that it was unclear if they are willing to sell.

Richardson is also looking to expand to Latin America, Australia and Eastern Europe, where more crop is produced than can be consumed domestically.

But the U.S. “is the logical growth direction,” Vossen said. “We don’t have to be the largest, but we have to be meaningful.

“There’s no point in acquiring small businesses if they don’t move the EBITDA needle for the organization in an effective way.”

Vossen said if Andersons, long considered by analysts as a takeover target for its grain storage and rail cars, Bartlett or Scoular are willing to sell, Richardson would have to outbid North American and Asian competitors.

Andersons spokeswoman Debbie Crow said the company does not comment on speculation. Bartlett and Scoular spokespersons could not be reached immediately.

Andersons, which has a $1.2 billion market cap, has an attractive size, but also significant family ownership that could complicate a transaction, Vossen said.

Richardson is interested in U.S. assets in grain-handling, processing and crop inputs, mainly in wheat-growing areas, he said.

The company may build U.S. assets once it acquires a critical mass, he added.

Legumex Walker previously said it is open to a sale. Vossen said he is not interested in Winnipeg-based Legumex’s Washington-state canola crushing plant and is undecided about its special crop assets.

Richardson, the largest division of privately-held Winnipeg firm James Richardson and Sons, has a share of Western Canada’s grain handling capacity similar to that of Glencore’s grain handling arm Viterra .

Richardson is currently trying to close one acquisition in Western Canada and one in Eastern Canada, Vossen said, declining to give details.

Richardson’s last big deal was its $900 million purchase of certain Viterra assets when Glencore bought the Canadian company in 2012.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.

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G3 Global Grain Group, a joint venture of Bunge and Saudi Agricultural and Livestock Investment Co. (SALIC), said it will buy a 50.1 per cent stake in CWB for $250 million.

G3 sees opportunities to build modern grain handling facilities in Canada that can help move crops to ports and export markets more efficiently, the company’s CEO Karl Gerrand told Reuters.

“I would view CWB as just one enterprise,” he said. “I would say it’s a start of building what we envision to be a coast-to-coast Canadian grain enterprise.”

G3 is merging CWB’s network of seven grain elevators in Western Canada and port terminals in Ontario and Quebec with a Bunge export terminal in Quebec City and four elevators in Quebec. CWB, formerly known as the Canadian Wheat Board, also is building four grain-handling facilities in Manitoba and Saskatchewan that will become part of G3.

The company sees an opportunity to add capacity on Canada’s West Coast, but will focus on integrating assets from CWB and Bunge before moving ahead with any projects, said Gerrand. He resigned as managing director of Bunge Canada to lead G3.

“Down the road we’ll look at filling gaps,” he said.

Gerrand’s vision for growth emerged as the CWB deal sparked speculation about the potential for more consolidation in the North American grain industry as traders seek to establish footholds in top-producing markets.

Analysts have long considered U.S. agricultural company The Andersons a prime takeover target because of its diversified assets, including grain storage facilities and rail cars. A company spokeswoman declined to comment on the CWB deal.

Rich Beaven, principal at investment firm Signia Capital Management, said he may invest in Andersons following a recent slide in the stock price. He sold all his shares two years ago when prices climbed.

“It would be a very interesting opportunity for somebody to acquire good market share and good assets at a very reasonable price here,” Beaven said about the potential for a takeover, adding an overseas buyer seemed most likely.

Andersons shares rose 3.3 per cent to US$41.51; Bunge shares gained 1.2 per cent to US$86.95.

— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago.

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The story mentioned Glencore’s interest in expanding its agricultural assets and named Ohio-based Andersons as well as privately held companies Scoular Co. and Lansing Trade Group as possible targets, citing unnamed people familiar with Glencore’s thinking.

Glencore declined to comment and Andersons could not be immediately reached for comment.

Swiss-based Glencore, a mining company and commodities trader, expanded its agriculture portfolio in 2012 with its US$6.1 billion purchase of Canadian grain handler Viterra.

More recently, Glencore bought a 50 per cent stake in a northern Brazilian grain export terminal from Archer Daniels Midland for an undisclosed sum.

Glencore has said it is interested in acquisitions in the U.S., the world’s largest agricultural exporter and a market dominated by ADM, Bunge, Cargill and Louis Dreyfus, known as the ABCDs of global grain trading.

Andersons’ businesses include grain handling, rail car leasing and turf products. The company also produces corn-based ethanol biofuel at four plants in the U.S. Midwest.

Shares of Glencore rose 4.7 per cent on the London stock exchange. Andersons gained 6.2 per cent on Nasdaq at mid-afternoon.

— Reporting for Reuters by Karl Plume in Chicago.

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