Global commodities trader Cargill Inc. will sell its crop insurance business to the Silveus Insurance Group next month, the two companies said.
The deal will close the second week in January, said Tyler Silveus, chief executive officer for Silveus, based in Warsaw, Indiana.
"We are not disclosing terms of the deal, other than we are purchasing the company and we are going to do our best to maintain all their agents, customers and employees," Tyler Silveus said by phone.
The Silveus group has roughly 70 insurance agents and its purchase of the Cargill unit will add 15 to 17 more, making it the largest U.S. crop insurance firm, Tyler Silveus said.
The sale of the Cargill unit comes at a time when global commodities companies are under pressure from slumping prices, slowing demand in China and weakness in emerging markets where Cargill has significant investments.
Cargill last month announced a new executive leadership team under Chairman and Chief Executive Officer Dave MacLennan, replacing its previous two-tiered executive leadership structure.
Cargill said it entered the crop insurance agency business in 2007.
Dave Baudler, president of Cargill AgHorizons U.S., said the company's mission is help farmers manage risk and make the most of their investments in agriculture.
"We believe we can accomplish this mission through our core grain marketing and risk management programs without being directly involved in the sale of crop insurance," Baudler said in a joint statement issued by Cargill and Silveus.
Tyler Silveus said the market for crop insurance agents is "fragmented" and that his company hopes to acquire more businesses, despite the downturn in the agricultural economy.
"We protect farm families and make sure they have stable means," Silveus said, adding, "This is the time we need to grow because we are needed the most."