(Reuters) – U.S. grain handler The Andersons Inc, long considered a takeover target in the agribusiness industry, on Wednesday named an executive from larger rival Cargill Inc as its new chief.
The appointment of Patrick Bowe, who was a corporate vice president for Cargill and a leader of its food ingredients unit, as CEO may revive speculation that Andersons could be acquired.
Bowe, 56, will replace Michael Anderson, who has been Andersons’ CEO for 16 years, on Nov. 2, according to a statement. Anderson, whose grandfather founded the Ohio-based company, will remain chairman of the board.
“Mike is not retiring,” company spokeswoman Debra Crow said. “He has decided to take a reduced schedule and stepped down as CEO.”
Analysts have considered Andersons, which has a $950 million market value, to be a target in the farm sector because of its diversified assets, including grain storage facilities and rail cars.
In May, Michael Anderson said the company was not interested in being acquired, after Richardson International, one of Canada’s largest grain handlers, expressed interest in a takeover.
Bowe was not available to discuss his plans for the company, Crow said. In the statement, he said he was looking forward to “capitalizing on the unique opportunities that lie ahead.”
Bowe will earn a base salary of $900,000 and be eligible for bonuses, according to a filing with the U.S. Securities and Exchange Commission. That is a 58 percent increase from Michael Anderson’s base salary last year of $570,000.
Under Bowe’s contract, the terms for severance payments during his first three years on the job will be different from the plan generally available for senior executives, according to the regulatory filing.
If there is a change in control of the company before Bowe finishes three years, he will receive accrued benefits, a year’s worth of outplacement services and continued participation in the company health plan.
The filing did not explain how these conditions differ from the company’s standard terms, and Crow had no immediate comment on the matter.
After three years, Bowe’s severance payments and benefits will conform with those generally available for executives, the filing says.
The farm sector has been under pressure lately from a steep slide in grain prices following massive U.S. harvests. Adjusted net income attributable to Andersons’ for the six months ending on June 30 was $35.2 million, down from $56.4 million last year.
Andersons’ stock price is down about 35 percent this year. Shares were up 2 percent to $34.63 in afternoon trading. (Reporting by Tom Polansek; Editing by Bernard Orr)
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