Before news of the accounting issues broke and sent ADM shares tumbling 24 per cent on Monday, the biggest fall since 1929, according to the Center for Research in Security Prices, the company had been forecasting the Nutrition unit it has been expanding for much of the past decade would return to profit growth in 2024.

The recovery in the business segment that generated about 11 per cent of profit for ADM in 2022 would have helped cushion the blow from thinning margins in soybean crushing and ethanol, and from lower crop prices as global supplies of corn and soy rise, analysts said.

“It is now uncertain whether Nutrition operating profits will return to (year-over-year) growth in 2024,” said Arun Sundaram, senior equity analyst at CFRA Research.

“We expect the investigation and uncertain outlook to cast a shadow over ADM’s shares, as the Nutrition segment was once the fastest growing and most profitable segment,” he said.

CFRA cut its 12-month price target for ADM to $61 a share from $76 previously, one of several analysts that downgraded ADM share targets Monday.

Shares were up 1.6 per cent on Tuesday after sinking to a nearly three-year low the previous day.

ADM and its crop processing and trading rivals cashed in on historically wide soy crushing margins over the past two years due to strong demand for vegetable oil to make biofuel, and reduced soy product supplies from drought-hit Argentina. Those margins are now thinning due to expanded U.S. processing capacity and a projected crop rebound in Argentina.

Meanwhile, margins for producing ethanol biofuel, a cornerstone of ADM’s portfolio, have narrowed and a global grain glut has curbed crop exports from the United States, home to the bulk of ADM’s operations.

Rivals including Bunge BG.N have more of an export base in Argentina and Brazil.

Lowered outlook

ADM on Sunday put its CFO Vikram Luthar on administrative leave and postponed the upcoming release of fourth-quarter results and its annual 10-K filing with the U.S. Securities and Exchange Commission (SEC).

The investigation started in response to a voluntary document request by the SEC. ADM said it was cooperating with the regulator. An SEC spokesperson declined to comment about the voluntary document request and if the agency is investigating ADM.

The company also cut its adjusted earnings forecast to “above $6.90” per share for 2023 from an “excess of $7 a share” view earlier, and withdrew all of its forward-looking outlooks for Nutrition.

ADM has invested billions of dollars over the past decade in Nutrition, the smallest yet fastest growing of its three main business units, starting with its $3 billion acquisition of WILD Flavors in 2014. In that time, annual adjusted earnings per share swelled from $2 to $3 a share to a record $7.85 in 2022.

ADM executives frequently tout the segment as the future of the company, aiming to capitalize on healthier eating trends and rising consumer demand for natural ingredients and flavorings.

The unit also provided more earnings stability as company results were tied less directly to the highly cyclical commodities market.

It was unclear if two recent Nutrition unit acquisitions due to close early this year would be impacted. ADM announced the purchase of Revela Foods, a Wisconsin-based developer and manufacturer of dairy flavor ingredients, and UK-based flavor and ingredient firm FDL late last year. Analysts also struggled to gauge future returns for the Nutrition segment.

“If we can’t rely on the financial statements, it’s hard to judge the return that they are getting for all these acquisitions if there is going to be a massive restate of profits that affects multiple years,” said Seth Goldstein, strategist with Morningstar.

–Additional reporting for Reuters by David Gaffen and Tom Polansek.

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The Italian-American group, whose shares are currently traded both on the NYSE and in Milan, earlier this year announced a plan to abandon its Italian listing.

CNH said in a statement on Tuesday that the Milan Stock Exchange had approved an application it filed to delist its ordinary shares from Milan bourse and had set the Jan. 2 date for when a NYSE single listing will be effective.

Its shares will be tradable in Milan until Dec. 29.

CNH also on Tuesday lowered its 2023 revenue forecast, citing a softening for its farm machinery, predominantly in South America, sending its shares plummeting.

As part of its New York single-listing plan, CNH announced a new share buyback program worth up to US$1 billion.

“The program is intended to optimize the capital structure of the company and to assist with offsetting any potential volatility arising from the delisting of its shares on Euronext Milan,” CNH said in a statement.

Since it spun off its truck and bus unit in January 2022, now separately listed as Iveco Group, the majority of CNH stock trading has progressively shifted to NYSE, the company said.

“Concentrating trading in one market should allow for increased liquidity and investor focus, while further simplifying the company profile and compliance requirements,” it said.

The new buyback program will run between Nov. 8 and March 1 and will be funded through the company’s liquidity.

It will consist of two components: the repurchase of shares worth up to 400 million euros (C$588 million) on Euronext Milan and on multilateral trading facilities between Nov. 8 and Dec. 29 and the repurchase of shares for the remaining amount to be executed on NYSE between Nov. 8 and Match 1.

Goldman Sachs is acting as financial advisor to CNH, while BNP Paribas is acting as co-advisor and buyback agent for the group in Europe.

— Reporting for Reuters by Giulio Piovaccari.

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JBS in a securities filing offered a one-time dividend payment of about 2.2 billion reais (C$621 million) to coax investors into backing the longstanding plan.

Shareholders will decide whether to accept the proposal at a general meeting yet to be scheduled.

JBS global CEO Gilberto Tomazoni said it is possible that the meeting will take place in 30 days. He believes that by December all steps to complete the transaction will have been taken so that the company’s shares can start trading in New York.

The proposed structure will use a Netherlands-based vehicle called JBS NV and have Class A shares with one voting right and Class B shares with 10 votes, JBS said. JBS NV’s class A common shares would trade in the U.S. and Brazilian depositary receipts would be listed for trading in Sao Paulo.

JBS’ management has repeatedly made the case that a U.S. listing would reduce its cost of capital and help its shares trade at multiples closer to peers such as Tyson Foods and Pilgrim’s Pride, which it controls.

Analysts at Bradesco BBI agreed that the much-awaited move will help close the valuation gap to its main peer in the U.S., referring to Tyson.

Sao Paulo broker Genial said JBS is a “buy” as a proposed listing in the U.S. will help improve its governance standards.

“A dual listing would better align JBS’ corporate structure it to global peers, which we believe could be received positively by investors,” Goldman Sachs said.

JBS in 2007 was the first Brazilian meat packer to go public. That year saw JBS embark on an acquisition spree in the U.S., followed by its purchase of the XL Foods beef packing business in Canada in 2013. In years prior, it had expanded capacity in Brazil and bought plants in Argentina, marking the start of its aggressive internationalization.

The U.S. listing has been in the works for the better part of a decade, but was postponed in part due to a 2017 corporate corruption scandal in Brazil and then again amid the COVID-19 pandemic.

JBS gets the lion’s share of its revenue from the U.S. market, where it processes beef, poultry and pork products for domestic consumption and export.

The JBS USA arm also oversees the company’s operations in Canada, which today include the former XL beef slaughter and packing plant at Brooks, Alta. and case-ready meat plants at Calgary and at Belleville, Ont.

— Reporting for Reuters by Ana Mano and Roberto Samora in Sao Paulo.

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Winnipeg-based, publicly-traded Buhler Industries announced Wednesday that Combine Factory Rostselmash has bought another 16.3 per cent of Buhler shares for $3 per share, or about $12.25 million.

Buhler, whose own product lines include Versatile tractors, combines, seeding and tillage equipment and Farm King implements, also makes the M8 tractor line for Kubota at its Winnipeg plant.

Rostselmash, which bought its 80 per cent stake in 2007, has picked up the additional shares in a private deal with Highland Park Financial, controlled by Buhler board member and former chair John Buhler, the company said.

The deal raises Rostselmash’s stake from 80.4 per cent up to 96.7 per cent of Buhler Industries, which said Wednesday the Russian firm’s latest purchase was made for “investment purposes.”

Buhler’s TSX-traded stock closed Wednesday at $2.95 per share, its lowest value since February.

Starting as a state-owned factory in 1929, Rostselmash started producing combine harvesters in 1931, went publicly traded in 1992 and was taken private in 2000.

The company, based at Rostov-on-Don on the Sea of Azov, today makes combines, forage harvesters and tractors. — Glacier FarmMedia Network

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The overall value of the deal was not disclosed but LDC said in a statement that a portion of the proceeds had been invested in the full repayment of a US$1.051 billion loan that LDC had granted to its parent company.

The stake sale to ADQ was initially announced last November.

That ended a long hunt for an investor by controlling shareholder and chairwoman Margarita Louis-Dreyfus, who had built up debt buying out other family members during a period of lean profits for the commodity merchant.

LDC, known as Dreyfus, is the “D” of the “ABCD” quartet of renowned global agricultural commodity firms alongside ADM, Bunge and Cargill.

“This partnership with ADQ reinforces LDC’s position and financial strength to accelerate strategic investments (…) including in new areas such as plant-based proteins, as well as in projects to move further downstream in several of our existing business lines,” CEO Michael Gelchie said in the statement.

The financial pressure on LDC in recent years was also linked to Brazilian sugar firm Biosev, previously owned by LDC’s parent.

The US$1 billion loan from LDC to its parent, originally due in 2023, was part of a bailout for Biosev.

That burden has also eased after LDC’s holding firm agreed this year to sell Biosev to Brazilian energy company Raizen .

A surge in commodity prices and strong grain demand from China have also boosted earnings for merchants during the coronavirus pandemic, helping LDC’s profit recover last year.

For state-owned ADQ, the investment in LDC extends a foray into food commodities that are crucial to import-reliant Gulf states.

The deal with LDC outlines a long-term supply agreement to sell agricultural commodities to the United Arab Emirates.

— Reporting for Reuters by Gus Trompiz in Paris.

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The company’s prospectus to list on Shanghai’s Nasdaq-style STAR Market was posted online by the Shanghai Stock Exchange on Friday, confirming details reported this week by Reuters after the application was filed on Wednesday.

“Syngenta Group will expand and renovate its production facility and implement strategic acquisition to meet growing market needs,” the company said in the document.

Syngenta said in the filing that its application to list on the STAR Market had been approved and it would issue up to 2.79 billion shares.

The flotation, set to be the world’s biggest this year, will value the maker of pesticides and seeds based in Basel, Switzerland, at about $60 billion including debt, or $50 billion without, sources have told Reuters (all figures US$).

The filing means the flotation is likely to take place by the end by 2021, said the sources, who were not authorized to speak to media and declined to be identified.

A secondary listing for Syngenta is also being considered that could take place less than a year after its debut, with exchanges in Zurich, London and New York among the options being examined, the people said.

Proceeds will fund acquisitions, including deals already announced to buy Yangnong Agrochemical and Valagro, the filing said.

Cash raised will also be used on other projects such as advanced agricultural technology research, production expansion, and upgrading and maintaining its facilities.

Funds will also be used to expand further its modern agricultural service platform — which trains farmers in China — and to repay long-term debt, it said.

The Swiss seeds and crop protection giant was bought in 2017 for $43 billion by ChemChina, which was folded into Sinochem Holdings Corp. this year.

The acquisition remains China’s biggest takeover of a foreign company and is aimed at using Syngenta’s top-tier chemicals and patent-protected seeds to drastically improve domestic agricultural output.

Since being taken over, Syngenta has been merged with Israeli agrochemical firm Adama and the fertilizer and seed business of Sinochem.

Syngenta, the world’s No. 1 crop protection maker and No. 3 seed supplier, competes with Germany’s BASF, Bayer and U.S. agrochemicals company Corteva in the speeds and sprays market.

The company employs 49,000 people globally and generated sales of $23.1 billion in 2020. Its biggest markets are the U.S. and Brazil, while it is growing rapidly in China.

Syngenta reported first-quarter sales of $7.1 billion, 20 per cent higher year-on-year, with earnings before interest, tax, depreciation and amortization (EBITDA) rising 19 per cent to $1.5 billion.

Net profit rose 72 per cent in the first quarter, the prospectus said.

— Reporting for Reuters by John Revill in Zurich, Meg Shen in Hong Kong and Dominque Patton in Beijing.

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Farmers Edge, founded in 2005 in Pilot Mound, Man. by agronomists Wade Barnes and Curtis MacKinnon, has carved out a niche using field-centric data, artificial intelligence and its FarmCommand data management platform.

CEO Wade Barnes called it an exciting day during an online press conference Wednesday marking the event from the firm’s Winnipeg headquarters.

“It’s a transformational day for Farmers Edge and a huge change for all of agriculture as we see the digitization of the most important industry in the world,” Barnes said.

Barnes added that the company will use the new funding — totalling $125,001,000, based on 7,353,000 common shares issued at $17 per share — to build on its vision of digital farming.

“We’ll be scaling up our teams to grow the business,” he said. “We’ll also be developing new products.”

In many ways the IPO process represents the maturation of any company, he said, but added that it accomplished some specific things for Farmers Edge.

Most of the venture capital that’s been raised over the past few years has now been converted into shares, he noted.

“It leaves us with a really clean balance sheet, and lots of dry powder to go out and grow the business organically,” he said. “This is at a time when digital agriculture is growing rapidly.”

Responding to questions from financial journalists during the virtual question-and-answer session following company presentations, David Patrick, Farmers Edge’s chief financial officer, said interest was strong in the offering.

“Our underwriting partners told us there was about nine times the interest as there were available shares,” he said.

By 2 p.m. on the day of the IPO, share prices had already climbed to $19.64, rising $2.64 from the IPO price of $17 per share.

The company initially aimed to sell a 16 per cent stake with shares priced between $10 and $17 each, according to Feb. 9 sale documents.

National Bank of Canada and Canadian Imperial Bank of Commerce led a group of five investment banks on the IPO, and have an option to acquire an additional 15 per cent of the offering.

The company will trade on the TSX under the symbol FDGE.

— Gord Gilmour is editor of the Manitoba Co-operator in Winnipeg.

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Cannabis producers have issued stock worth this amount in the first five weeks of 2021, investment firm Viridian Capital Advisors estimates, as prices have risen on a promise of federal decriminalization of marijuana and a host of other reforms by the incoming Biden administration.

Canadian pot companies have been the largest beneficiaries of the rally in shares, owing to the fact that they have been allowed to list on U.S. exchanges, while U.S. companies that harvest or sell marijuana within the country are forbidden from doing so.

Retail investors have also piled into the pot sector this week, with Tilray, Aphria and Sundial Growers emerging as the new favorites of Reddit’s popular WallStreetBets forum that was behind recent rallies in some shorted stocks.

In a vote of confidence in the sector, a single unnamed institutional investor this week bought $100 million worth of stock in U.S.-based pot producer Green Thumbs Industries’ initial public offering, according to a company filing (all figures US$).

Calgary-based Sundial, a medical cannabis producer, has issued over a billion new shares since September.

Considered by many analysts to be a bankruptcy risk earlier, the company has improved its cash position from $22 million to over $600 million in just four months and fully repaid its current debt obligations.

Market experts, however, have said the cannabis rally is already overdone and valuations are once again becoming unrealistic, especially for the Canadian companies that may not even get much upside from U.S. decriminalization.

Viridian said the turnaround in Sundial’s fortunes is good for them, but the advisory firm is “a bit skeptical about any fundamental changes at the company justifying this Cinderella story.”

AMC Entertainment and American Airlines were among a handful of companies to have raised funds from the market when their shares soared last month.

GameStop could not seize on the Reddit-fueled rally to sell shares because of regulatory restrictions, according to three people familiar with the matter.

— Shariq Khan reports on the cannabis, oil and gas sectors for Reuters from Bangalore.

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The Feb. 11 court date in Toronto comes after AGT shareholders voted Tuesday at a special shareholders’ meeting in favour of privatization, according to a company news release.

Shareholders, representing a total of 74.8 per cent of AGT’s outstanding shares, voted 72.5 per cent in favour of the privatization with 27.5 per cent against, AGT said.

Following the court ruling, the company expects to be delisted from the TSX sometime during the first quarter or early in the second quarter. A company official declined to comment publicly on the privatization when contacted.

The buyer group has been led by AGT CEO Murad Al-Katib and includes other top AGT executives, plus Fairfax Financial Holdings and Point North Capital. As part of the group’s privatization plan, they will acquire all outstanding shares for $18 per share.

The group announced its intentions to take AGT private last July. Company shares that day leapt from $13.17 per share to $17.76, but by early December the price slipped to $15.84. The price fluctuated over the next couple of months and gained $1.56 this week alone, closing Friday at $17.86.

However, that price is a far cry from the $42.05 at which AGT traded in May 2016. AGT’s share values were hurt by India increasing its import duties on pulses. India had been Canada’s largest pulse customer.

Shareholders opposed to AGT’s privatization, led by the investment management firm Letko, Brosseau and Associates, have argued the company has been undervalued.

Letko Brosseau, which manages an 18.6 per cent stake in AGT, reiterated in a Jan. 29 statement that it would vote against the going-private deal.

AGT’s financial performance, Letko Brosseau said, has been “negatively impacted by industry factors and the proposed transaction comes during this time of weak performance and low share price.”

The investment firm said it “believe(s) these industry pressures will ease and expect(s) that the company’s financial performance should strengthen as industry conditions improve.”

Al-Katib started AGT under the SaskCan Pulse Trading banner in 2003. By 2009, it had evolved into Alliance Grain Traders, when the Alliance Grain Traders Income Fund became a publicly-traded corporation. Alliance then morphed into AGT Food and Ingredients in 2014.

— Glen Hallick writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting. Includes files from Ashley Robinson of MarketsFarm and Glacier FarmMedia Network staff.

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Interest has boomed in Canada’s marijuana companies ahead of legalization of recreational cannabis in the country next month. Several U.S. states have also legalized marijuana but it remains against federal law.

Shares of rival Tilray Inc. have surged more than 1,000 per cent since their listing in July. Other U.S.-listed Canadian marijuana companies include Canopy Growth and Cronos Group.

Marijuana producers are in demand as several companies, including Constellation Brands and Molson Coors Brewing, are looking to tap cannabis-infused drinks market.

Earlier this week, Coca-Cola said it was closely watching the fast-growing marijuana drinks market for a possible entry.

Edmonton-based Aurora’s plan for a U.S. listing was first reported by the Financial Post on Wednesday.

— Reporting for Reuters by Debroop Roy and Laharee Chatterjee in Bangalore.

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