Almost 12 months after the deal was first mooted, Cargill has officially sold its international malt business, including five Australian sites, to giant French farmer co-operative, Axereal.
The grain co-op's Boortmalt division will become the world's biggest barley maltster with a combined malt output of three million tonnes annually.
Cargill had owned the Joe White Maltings business in Australia for six years, although closed its Tamworth plant in northern NSW in May last year to concentrate more production at Minto in southern Sydney.
Its other Australian plants were in Victoria at Ballarat, where Joe White Maltings was founded in the 1890s; Devonport, Tasmania; Port Adelaide and Perth.
Prior to the sale Cargill owned 16 malthouses in nine countries across five continents, with a total production capacity of 1.7m tonnes.
Late last year GrainCorp, was speculated as a likely bidder for the Cargill business in Australia, and potentially further afield.
However, the pressure of the drought's worsening impact on its grain receivals, plus an internal asset review, and then a surprise $2.4 billion takeover bid from Long-Term Asset Planners in December, forced the eastern Australian-based grain player to drop out of the list of potential contenders.
Instead, GrainCorp this year announced plans to spin off its own global malt division, to be known as MaltCo.
It will operate as an independently Australian-listed business, led by current GrainCorp chief, Mark Palmquist, and chairman, Graham Bradley.
The LTAP takeover bid failed to eventuate, but details of the MaltCo float are expected to be nearing finalisation.
This acquisition will help ensure our trajectory is competitive
- Jean-Franois Loiseau, Axereal Group
Axereal confirmed it was in serious discussions with Cargill in mid-December last year, but its takeover was not actually implemented until last week, at the start of November.
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Group president, Jean-Franois Loiseau, said the acquisition met two strategic objectives - investing in the downstream processing of barley to increase value for farmers in France and internationally, and it helped fulfill the co-op's long-term growth vision.
"This acquisition will help ensure our trajectory is competitive," he said.
"We at Axereal are leading the way for the agricultural transition with industrial innovation that provides quality food whilst respecting the environment."
Chief executive officer, Paul-Yves L'Anthoën, said the acquisition allowed the agribusiness co-op to diversify sources of value, and bolster its position in a growing sector.
"It also strengthens our relationship with the financial community," he said.
What is Boortmalt?
Boortmalt is headquartered in Belgium, where it's Antwerp malthouse is the world's biggest.
It was established in 1927 and now boasts market-leading expertise in the production of specialty malts for beer, whisky and food products.
CEO, Yvan Schaepman, said the takeover would enable the company to better mitigate risks, particularly those linked to climate change.
"It also allows us to accelerate development of new malting barley varieties and to create new malts," he said.
"With this acquisition, we are pursuing our primary ambition to become the best maltster in the world."
Parent co-op, Axereal, specialises in cereal production and processing for brewing, baking and livestock markets worldwide, servicing 12,700 farmer members.
It has 4000 employees and revenue of almost $5 billion a year.
It operates in 21 countries from Algeria, Argentina and Australia to India, Ireland, the Netherlands and US.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
