With crops like corn to soybeans headed for their longest price slump since at least the 1990s, shrinking profit margins may make owners of North American grain assets more inclined to sell. While premiums remain near a 10-year high, they have declined, and the pace of deals for agricultural operations has accelerated, with the most transactions this year since at least 2000, data compiled by Bloomberg show.
“We’ve moved into more of a supply-driven market once again,” said Vossen, who last acquired major crop-handling assets in 2013 with an C$800 million ($598 million) deal that included 19 grain elevators from Canada’s Viterra Inc.“What we may see is a more fluid market in terms of mergers and acquisitions than what we’ve seen in the past.”
Closely held Richardson is “actively” looking in the U.S., while American companies such as Bunge Ltd. are trying to expand in Canada. Assets in North America, which exports more grain than any other region in the world, also are drawing interest from overseas because global demand for food is expected to keep rising for decades.