Bunge North America on Nov. 17 announced that the company has reached an agreement with Grupo Minsa S.A.B. de C.V. terminating a deal the two companies announced in August 2016 under which Bunge would have acquired a controlling interest in Minsa.
When the proposed transaction was first announced, Bunge predicted a closing in early 2017, subject to conditions including authorization of the Comisión Federal de Competencia Económica (Mexican Antitrust Commission).
With the transaction, Bunge would have gained a controlling interest in four mills in Mexico and two mills in the United States. At the time the deal was announced, the facilities had a combined annual processing capacity of 700,000 tonnes of grain and produced a broad portfolio of branded corn flours and pre-mixes for tortillas and other goods.
In February 2017, Soren Schroder, chief executive officer of Bunge Ltd., White Plains, N.Y., struck an optimistic note about the deal.
“Grupo Minsa, a leading North American corn flour producer, will complement our existing wheat milling business in Mexico and increase our value-added offerings to B2B customers in the United States,” Mr. Schroder said in a call with investment analysts.
While necessary authorizations were delayed, Bunge as recently as August predicted the transaction would be completed before the end of 2017, the company said. Bunge said more than regulatory hurdles were behind the decision not to move forward.
“During this time, a change in Minsa’s business model in Mexico led the two companies to agree to cancel the transaction,” Bunge said.
Bunge said both companies have terminated all obligations under the original agreement and signed mutual agreements releasing them from associated liabilities.
Todd Bastean, chief executive officer of Bunge North America, said the strategy that prompted Bunge to pursue Minsa in the first place remains unchanged.
“We remain committed to strengthening our Food and Ingredients segment by expanding our value-added food products lines,” he said. “We will continue to look for investment opportunities that position Bunge for growth by enabling us to deliver a high quality, reliable supply of food ingredients to our customers around the globe.”
By Josh Sosland
Source: Food Business News
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