Japan's Marubeni Corp. is buying Nebraska-based grain and fertilizer company Gavilon Holdings LLC for about $3.6 billion in a move to capitalize on rising demand in developing nations for grain and fertilizer, reports the Associated Press.
Gavilon has been privately held for owning and operating grain, fertilizer and energy commodities distribution and storage. Marubeni is diversified in distributing various industrial and consumer goods as well as grains.
The Japanese company by buying Gavilon gains 140 grain loading sites most with grain storage in the U.S. Also included in the deal are sites in Brazil, Australia and the Ukraine. Additionally, Marubeni gains control of the Omaha-based Gavilon fertilizer terminals and storage and blending facilities in 59 U.S. locations. Marubeni plans to be a large-scale world-wide player in grain and fertilizer for developed and developing countries.
The Associated Press noted that Gavilon was created in 2008 when ConAgra Foods sold its commodity trading and grain storage operations to the Ospraie Special Opportunities fund. The private investors paid $1.6 billion in cash and agreed to give ConAgra $525 million in debt securities in the deal.
The energy trading referenced in the sale is reference to Gavilon having operated an energy trading business that deals in crude oil and natural gas. The AP story notes that its network can store 8 million barrels of crude oil, 10 billion cubic feet of natural gas and 500,000 barrels of refined fuels, and Marubeni is taking over those facilities and operations, too. With all operations included there are about 2,000 employees worldwide going from being Gavilon employees to those of Marubeni.