Zen-Noh Grain Corp. (ZGC), a subsidiary of the National Federation of Agricultural Cooperative Associations of Japan (Zen-Noh), announced that it has reached an agreement to acquire 35 operating U.S. grain origination elevators along the Mississippi River from Bunge North America Inc., a subsidiary of Bunge Ltd. Closing on the transaction is subject to regulatory approval.
ZGC's affiliate, CGB Enterprises Inc., will operate the acquired facilities through its wholly owned subsidiary, Consolidated Grain & Barge Co. CGB currently operates more than 100 grain origination facilities in the U.S. and serves as a direct connection to U.S. farmers by providing an array of services, from buying, storing, selling and shipping crops to financing and risk management.
ZGC recently expanded the annual capacity of its Convent, La., export elevator and said this acquisition contributes to its ability to adequately source a stable supply of grains, oilseeds and feed ingredients for Japan and other destinations by strengthening its origination across a broader footprint in the U.S.
Rabo Securities USA Inc. and The Norinchukin Bank have acted as financial advisors, and Baker McKenzie has acted as legal advisor to ZGC in this transaction.
Bunge chief executive officer Greg Heckman said, "This transaction will allow Bunge to operate more efficiently and reinvest in higher-returning areas of the company while reducing costs and strengthening our balance sheet. Bunge will continue to be an industry leader in the U.S. grain marketplace through global grain trading and distribution with our export terminals in Destrehan, La., which we are expanding, and EGT, our joint venture in the Pacific Northwest. We will also continue our strong presence in the soybean processing business and milling operations."
Through certain supply agreements, Bunge said it will be able to access a larger and stronger origination and distribution network through Zen-Noh to better serve American farmers and global export customers.
In addition to the export terminals in Destrehan and the EGT joint venture, Bunge will retain ownership in Bunge-SCF Grain, its joint venture with SCF, and the Bunge elevators in Indiana that directly support the company's soybean processing plant in Morristown, Ind.
ZGC trades and exports corn, soybeans, sorghum, wheat and byproducts from its state-of-the-art export elevator located in Convent along the Mississippi River to Japan and other global markets. ZGC also has grain origination interests in Canada and Brazil and a forage processing business in Pasco, Wash.
CGB is headquartered in Covington, La., and operates more than 100 grain facilities across the Midwest through Consolidated Grain & Barge. In addition to grain facilities, CGB has dedicated operations in logistics and transportation, crop insurance, agri-finance, soybean processing, producer risk management and other related businesses.
Bunge North America, headquartered in St. Louis, Mo., trades raw agricultural commodities for domestic use and for export to world markets. It is in the business of oilseed processing, refining edible oils, milling corn, rice and wheat and more.