Japan’s Marubeni buys Gavilon, a Nebraska-based grain company, for $3.6 billion

Japan’s Marubeni Corp. is buying the third-largest grain trader and distributor in the United States in an effort to become a top global grain distributor, the New York Times reported.

Marubeni will acquire Omaha, Neb.-based Gavilon Holdings LLC for about $3.6 billion, the Associated Press reported. It will also buy Orascom Construction Industries of Egypt’s 16.8 percent stake in privately-held Gavilon for $605 million, the New York Times reported.

If completed, the Gavilon acquisition will be biggest takeover overseas by a Japanese company in a year, according to data compiled by Bloomberg, Bloomberg News reported.

Marubeni executives believe there’s money to be made in supplying developing nations with grain and fertilizer as their needs grow, the AP reported.

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“We have been securing access to grain producers in North and South America, and bolstering sales in Japan and Asia,” the company said in a statement today, according to the New York Times. “We expect world grain trade volume to continue to grow on the back of robust demand in China and other emerging countries.”

According to the New York Times:

Buoyed by a strong yen, Japan’s big trading houses have been spending billions of dollars in recent years to secure access to resources like minerals and natural gas, helping to fuel a global commodities boom.

“Marubeni’s purchase of Gavilon will give it an inroad into grain purchases in the US and put it on par with the leader, Cargill,” Justin Tang, a Singapore-based analyst focusing on mergers and acquisitions with Churchill Capital, told Bloomberg News.

With Gavilon, Marubeni gets 140 grain loading sites plus a large grain storage and distribution network in the US, the AP reported. It also gains Gavilon sites in Brazil, Australia and the Ukraine, among other countries, and access to fertilizer terminals and storage and blending facilities in 59 US sites.

Gavilon President and CEO Greg Heckman said he doesn’t expect the deal to change Gavilon’s operations much, the AP reported. “As part of a larger trading organization, Gavilon will be well-positioned to more efficiently connect supply with growing global demand,” Heckman said in a statement.

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