By Tom Polansek
CHICAGO, Jan 30 (Reuters) - U.S. grain merchant Bunge Ltd BG.N bought two corn flour mills to expand its food and ingredients business, the company said on Tuesday.
The move comes after a bid to takeover Bunge by rival Archer Daniels Midland Co ADM.N that would consolidate the agribusiness sector. North American arm acquired the mills in Iowa and Texas through a deal for Minsa Corporation, the U.S. unit of Mexican corn miller Grupo Minsa SAB de CV MINSAB.MX that Bunge said was valued at $75 million.
Bunge and other agricultural traders, including ADM and Cargill CARG.UL , have been trying to diversify their businesses into higher-margin sectors, such as food ingredients and aquaculture, in the face of a global grains glut that has squeezed margins, reduced volatility and kept corn and soybean prices languishing for years.
Mergers in the agribusiness sector are seen as another potential remedy for the oversupply of grains.
ADM has proposed a takeover of Bunge, and Glencore (LON:GLEN) last year sought a tie-up with Bunge in what was viewed as a start of a wave of mergers and acquisitions in the grain industry. rebuffed the Glencore's approach, and a standstill agreement prevents Glencore from making a new offer until next month, a source said this month. Bunge has declined to comment on ADM's approach.
Acquiring Minsa's mills is "an important strategic step" to strengthen Bunge's food and ingredients business, Todd Bastean, president Bunge North America, said in a statement. It makes Bunge a leading U.S. producer of corn flour used to make tortillas and expands the company's reach into specialty products, such as organic corn flour, according to Bunge.
Bunge made the deal with Minsa after terminating an acquisition last year for a controlling stake in Grupo Minsa SAB de CV, which would have made Bunge the top grain miller in Mexico. September, Bunge bought a 70 percent stake in palm and tropical oils company IOI Loders Croklaan for nearly $1 billion - a move that industry experts said at the time would make it a tougher takeover target.