Hong Kong’s margin loan rules are due an overhaul 5 Apr 2017 The market collapse of a Hong Kong-listed dairy farming group highlights the perils of share pledging. Disclosure rules in the city don't go far enough. Investors need to know early on, and in full, if large blocks of shares are tied to loans.
U.S. immigration crackdown bets the farm 22 Feb 2017 The new president is moving hastily to deport more illegal workers as part of his America-centric policy. In the process of trying to protect industries like manufacturing, stricter rules will hit an agricultural sector already suffering from labor shortages and falling profit.
Syngenta forces hedgies to read Chinese tea leaves 26 Jan 2017 Investors have swung from despair to optimism over the agribusiness giant's $43 bln sale. The implied probability of ChemChina's bid for Syngenta succeeding has leapt from 10 pct to over 60 pct in a few short weeks. Beijing's involvement means extra complexity for arbitrageurs.
Libor-style doubts gut U.S. chicken benchmark 21 Dec 2016 The Georgia Dock index, used to set prices paid by grocery stores, has been suspended indefinitely. Based on submissions from producers, the measure had diverged from others and ruffled some feathers. Billions may be at stake for consumers - and companies like Tyson Foods.
Japan pays top price for Big Banana 9 Dec 2016 Sumitomo is buying Dublin-based Fyffes for 751 million euros. A 50 percent premium is expensive for the humble fruit, especially with no major banana boom on the way. Access to more volumes and markets gives the Japanese group agility in responding to global demand.
Brazil twists knife with reversed JBS carve-up 26 Oct 2016 The $11 bln meatpacker lost a fifth of its market value after the state development bank vetoed a spinoff of international operations that would have cut the company's financing costs. It's a reminder to global investors that the country's interfering ways will be slow to change.
Milk recovery sounds sour note for food producers 19 Sep 2016 Dairy Crest says higher cream prices could hit its margins, though it expects to meet full-year guidance. Sharp falls in milk prices over the past two years mean there are now fewer cows to go around. Yet as the cycle recovers, it's hard to pass higher costs on to consumers.
Bayer can still be saved from $66 bln splurge 14 Sep 2016 The agreed takeover of U.S. rival Monsanto is too expensive. The German group's investors have probably lost $7 bln in value already. The question is whether antitrust regulators do what shareholders can't and nix the tie-up. Paying the $2 bln break fee would still be preferable.
U.S. quibble with Chinese corn is too late for TPP 13 Sep 2016 The U.S. has challenged China's support for wheat and corn, the latest trade spat with Beijing as Obama pushes for a trade deal that would give the U.S. more leverage. WTO complaints do buttress the argument for TPP, but agriculture is a weak place to rally support.
Fertilizer duo bucks trend with $36 bln love-in 12 Sep 2016 Canada's Potash and Agrium are combining in a merger of equals. It's a contrast to past industry mash-up attempts, which gave off a whiff of exuberance before collapsing. There's plenty for both sets of shareholders to like, assuming the deal clears antitrust hurdles.
Bayer’s tendrils close around Monsanto 6 Sep 2016 A raised $65 billion takeover offer puts more pressure on Monsanto to bend to its German peer. Bayer might stretch a tiny bit further to win over the U.S. seed-maker’s board, but a deal at these levels makes little financial sense. Monsanto is already pushing its luck.
Potash giant emerges from ashes of failed deals 30 Aug 2016 Merger talks between Canada's Potash Corp and Agrium follow a string of aborted combinations dating back to Australian miner BHP Billiton's $39 bln swoop on Potash in 2010. As a commodities boom has gone bust, friendly attempts to forge a more modest merger look achievable.
ChemChina’s Syngenta joy has a downside 22 Aug 2016 U.S. regulators okayed the Chinese chemical group’s $43 bln bid for its Swiss peer, and only limited spin-offs may be required. With no synergies, ChemChina needs the skills it acquires to be compelling. The fact it was waved through raises the risk they may not be.
Brazilian meatpacker’s filet job leaves fat to cut 11 Aug 2016 JBS is asking bondholders to approve a plan to carve out non-Brazilian business and move it to Dublin. Tax savings and a lower cost of capital may help juice the valuation. The Sao Paulo-based company, however, is still larded with debt from its $27 bln acquisition spree.
Monsanto may be overestimating independence 19 Jul 2016 The U.S. crop giant rejected Bayer's latest $64 bln takeover offer, calling it "financially inadequate." To achieve the $125 a share on offer on its own over three years would be tough, however, even with aggressive assumptions. Monsanto boss Hugh Grant is protesting too much.
Monsanto-BASF talks smell like a red herring 14 Jul 2016 The besieged U.S. seedmaker is reportedly in talks about buying the German group's agrochemicals unit. A deal could see off Bayer's $62 bln bid for Monsanto. Persuading BASF to sell will be tricky. Still, the gambit might be a way of forcing Bayer to sweeten its offer.
Monsanto’s bid defense withers on the vine 29 Jun 2016 The U.S. seedmaker’s disappointing third-quarter performance makes it hard to see how Monsanto can lure chemical group Bayer into sweetening an already frothy $62 bln offer. The suitor may be willing to look past a cyclical dip, but its negotiating position now looks stronger.
Bayer-Monsanto could be squeezed in hungry world 3 Jun 2016 Population growth and climate change will boost demand for seeds and agrichemicals. Bayer's strategic rationale for a $62 bln Monsanto bid looks sound. But if food shortages really bite, the merged group's pricing power may come under attack. There are precedents in pharma.
Bayer’s Monsanto bid yields poor financial harvest 27 May 2016 The German chemicals group’s rejected $62 bln offer for the seed maker already appeared to violate one of its key principles: stick to projects whose returns beat the cost of capital. Upping the price to win over Monsanto would take heroic sales-growth assumptions to stack up.
Monsanto can push Bayer only so far 24 May 2016 The U.S. seed producer rejected a $62 bln offer from the German chemical giant, but said it was open to talks. Bayer’s shareholders reacted poorly to the initial bid while Monsanto investors are skeptical about chances for a deal. Negotiating power is limited on both sides.