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Glencore says looked at 3-4 smaller acquisition targets but could not conclude deal

Published 2017-11-15, 07:34 a/m
© Reuters.  Glencore says looked at 3-4 smaller acquisition targets but could not conclude deal
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GENEVA, Nov 15 (Reuters) - Commodities giant Glencore GLEN.L has looked at three or four smaller acquisition targets this year but was unable to conclude deals, the head of the company's agricultural arm said on Wednesday.

Chris Mahoney, chief executive of Glencore Agriculture, told the Global Grain conference in Geneva that Glencore nevertheless remained focus on acquisitions for growth and would concentrate on upstream origination assets.

There was scope for consolidation in the grain sector due to excess capacity, but the challenge was in securing good value in acquisitions, said Mahoney.

He added, following the presentation, that the attempted takeover targets would have represented relatively small deals.

"We feel we can capture benefits of strong demand by being strong at origin," said Mahoney.

"Origin in our mind lends itself better to big scale and more efficient assets," he added.

Glencore said in May it had made an informal approach to Bunge BG.N about "a possible consensual business combination", fanning speculation that the grain trading industry was set for large-scale consolidation after seeing profits eroded by high supply and low prices.

Bunge reacted by saying it was not in talks, and the Wall Street Journal reported last month that Glencore had a standstill agreement temporarily preventing it from making a hostile bid for Bunge.

Bunge is part of a the so-called ABCD quartet of global agricultural commodity traders that also includes Archer Daniels Midland ADM.N , Cargill CARG.UL and Louis Dreyfus AKIRAU.UL .

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