Cargill Mulls Sale of Metals and Energy Businesses
July 22 2016 - 4:00PM
Dow Jones News
Cargill Inc., the U.S. commodities giant, is considering a sale
of its metals and energy businesses as it revamps its portfolio
around core food and agricultural activities, according to people
familiar with the matter.
Cargill, the largest private company in the U.S. by sales, has
been pruning its vast business empire to help focus on more
profitable products and keep pace with consumers' changing
tastes.
The energy and metals businesses trade in markets including
North American power and gas, oil and oil products, steel and iron
ore. Cargill trades around 40 million metric tons of iron ore and
five million metric tons of steel annually, along with 200 million
metric tons of iron and steel derivatives, according to data on its
website.
"Cargill is very active in the energy and metals markets to
serve its customers," a spokeswoman said.
The company is exploring sales of the units as part of a
strategic review of those businesses, which still is in its early
stages, one person familiar with the matter said. Cargill may not
end up selling the businesses, the person said.
This month Cargill struck a deal to sell its U.S. agricultural
retail operations, which sell about $150 million in supplies and
services to farmers annually, to Canada-based agribusiness firm
Agrium Inc. Cargill also agreed to sell two Texas-based cattle feed
yards to Friona Industries LP, a rival feedlot operator.
Those were the latest in a flurry of deals designed to
reposition the 151-year-old agricultural conglomerate for future
growth under private ownership of the Cargill and MacMillan
families. Since mid-2015 Cargill also has sold its U.S. crop
insurance agency, a sauces business, its interest in a
steel-processing venture and its U.S. pork business.
As it sells assets, the company, which began as a grain trader,
is reversing some of the diversification it pursued in the 1980s
when it branched out into an array of products from steel to
rubber.
Cargill has reinvested some of the proceeds into acquisitions,
including deals for a salmon-feed company, the industrial chocolate
operations of Archer Daniels Midland Co., several U.S. meat
processing plants, and a software company focused on animal feed
formulation.
The company also has invested to expand existing poultry, animal
feed and egg businesses, while touting healthier ingredients for
bread dough and its efforts to reduce the use of antibiotics in its
chickens and beef cattle.
Write to Sarah McFarlane at sarah.mcfarlane@wsj.com and Jacob
Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires
July 22, 2016 15:45 ET (19:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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