Fertilizer deal offers investors bountiful harvest 6 Aug 2015 CF Industries’ $6.1 bln bid for most of rival OCI’s businesses comes with $500 mln of cost cuts that over time will virtually pay for the acquisition. The deal should also boost production capacity by 65 pct. Those are some powerful nutrients for shareholders to absorb.
Fertilizer deal talks emit whiff of exuberance 20 Jul 2015 U.S. nitrogen giant CF Industries is sizing up $6 bln Dutch rival OCI. A combination could bring tax and other savings. CF got the timing right when it bought rival Terra in 2010. This time, prices are falling and new supplies arriving. The M&A enthusiasm looks excessive.
Big Agriculture can weather foodie feedback loop 13 May 2015 Moves by the likes of Chipotle and Panera to drop genetically modified foods and other artificial ingredients risk snowballing. It’s a manageable problem, even for richly valued seed makers like Monsanto. Appeals to science are unlikely to change minds, but better products might.
Monsanto would have to dig too deep for Syngenta 11 May 2015 Big holders in the Swiss agribusiness say they’d back a $50 bln bid, or 10 pct more than the U.S. crops company offered last week. To justify a price that high, however, would require Monsanto to find at least $2 bln in annual cost savings. That sounds like an implausible harvest.
WH Group looks stuck in a value trough 4 Dec 2014 Shares in the Chinese-American pork producer have fallen 31 pct since its August IPO. Unusual moves by its chairman and a private equity backer are partly to blame. Though the stock now looks cheap, some long-term investors will soon be free to sell. Any recovery seems far off.
China dairy correction churns Fonterra profits 24 Sep 2014 A 76 percent fall in earnings for the New Zealand dairy group shows the China milk bubble deflating. Record milk prices have tested consumers’ tolerance, and traders may have overstocked. The underlying trends are still positive, but it will take a while to skim off the froth.
Giant fertiliser combo looks tough to cultivate 23 Sep 2014 Norway’s Yara is talking to U.S. rival CF Industries about a $27 bln tie-up. The two boast similar valuations and could reap sizeable synergies. Hence a near-$1 bln jump in Yara’s market cap. But a merger of equals is one of the trickiest deal varieties.
Fonterra’s China deal eases memories of spilt milk 28 Aug 2014 Buying a stake in baby food group Beingmate at a 25 percent premium is brave for the New Zealand dairy co-op, whose ex-partner Sanlu sold tainted milk in 2008. Focusing the tie-up on products made outside China is wise. But rising scrutiny of foreign companies ups the stakes.
U.S. farm credit looks safer than houses 19 Aug 2014 Washington’s $200 billion-plus subsidized agricultural lending complex includes Farmer Mac, a rural copy of ill-fated Fannie Mae and Freddie Mac. Despite a hot farmland market, though, the system looks ruggedly capitalized enough to avoid the bailout fate of the home-loan behemoths.
ADM goes M&A wild – sort of 7 Jul 2014 The $30 bln U.S. food giant is buying Swiss natural ingredient maker Wild Flavors for $3 bln. It’s ADM’s biggest deal, and a shift from its commodity business. A small add-on with like customers makes sense but won’t change how investors see the firm. The question is, what next?
Syngenta can yield extra value for shareholders 24 Jun 2014 Shares leapt on a report Syngenta had held abortive talks with rival Monsanto, in the latest tax-driven push by a U.S. acquirer. There would be big antitrust obstacles. Even if no deal emerges, the bid talk should pressure the Swiss agribusiness giant to tend to its own garden.
Rival’s split makes it harder for Dow to resist 10 Mar 2014 FMC, a $10 bln pesticide-to-battery-parts maker, is splitting its fast-growing ag and pharma businesses from stodgier commodity minerals. It’s similar to the breakup activist Dan Loeb wants at Dow Chemical. Boss Andrew Liveris is standing firm. FMC’s move weakens his case.
China’s push into food trading will be piecemeal 6 Mar 2014 State-backed COFCO is eyeing an agriculture joint venture with Singapore’s Noble, a week after taking control of Dutch grain trader Nidera. COFCO’s mission to ensure China’s food security is finally translating into large overseas acquisitions. Yet targets remain in short supply.
Proof of potash cartel revival will be in pricing 27 Jan 2014 New Kremlin-backed owners at Russia’s Uralkali, the world’s biggest potash producer, appear open to reviving a marketing alliance with Belarus. But it’s far from a done deal. Even if the cartel returns, it’s unlikely to survive long once BHP Billiton enters the business.
Merck woes show animal drugs are no panacea 30 Dec 2013 Animal medicine, whether for livestock or pets, is booming. Pfizer’s spinoff, Zoetis, trades at a fat valuation premium. But controversy over Zilmax, Merck’s muscle-building feed additive, suggests that an increasingly complicated food chain comes with its own investment risks.
Australia nudges dairy saga toward a finish 17 Dec 2013 Saputo has raised its offer for cheesemaker Warrnambool to A$537 million, at a regulator’s prompting. It could prove higher than a rival bid by Murray Goulburn, and looks more deliverable. Barring a knockout counterbid, investors would do well to take Saputo’s cash.
ADM should call Australia’s bluff with GrainCorp 2 Dec 2013 The U.S. agribusiness faces a paper loss on its 20 pct stake in GrainCorp after Australia blocked its A$3.4 bln takeover, arguing the market wasn’t sufficiently mature. ADM should sit tight, and then try again later. That would force Australia to show its real hand.
Australia too mealy-mouthed on protectionism 29 Nov 2013 Blocking ADM’s $3.1 billion takeover of GrainCorp is illogical. The U.S. buyer was paying a tidy premium for the Sydney-based wheat trader. While foreign investors won’t be happy, Canberra’s real mistake is in not saying plainly that it prefers a local bully to a foreign one.
Aussie dairy battle needs cheap debt to stack up 19 Nov 2013 Three bids in as many days have lifted the price tag for Australian dairy Warrnambool above A$500 million. Local cost savings and projections of China’s thirst for foreign milk help justify the frenzy. But the investment case also depends on low borrowing costs.
Review: Buffett clan puts up a good food fight 25 Oct 2013 The Oracle of Omaha has made billions and his farmer son is helping give them away. In “Forty Chances,” Howard Buffett chronicles efforts to end world hunger and bad philanthropic habits. It’s hard at times to relate to the plight, but reassuring to know his family is on the case.