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Cargill makes its first animal feed company acquisition in Brazil
October 27, 2017 / 2:03 PM / 22 days ago

Cargill makes its first animal feed company acquisition in Brazil

SAO PAULO, Oct 27 (Reuters) - Cargill Inc’s Brazilian unit has reached a deal to acquire a domestic maker of animal feed products, an executive said.

The acquisition of privately owned Integral Nutrição Animal, announced on Friday, is Cargill’s first purchase of a company in this segment in Latin America’s largest economy.

Cargill has been looking to diversify into new businesses as global grain traders face a margin squeeze because of a glut of the crops.

The deal gives Cargill 100 percent of Integral Nutrição’s assets, including a plant in Goiás, one of the nation’s main cattle growing states, Celso Mello, head of the Cargill’s animal nutrition business in Brazil, told Reuters.

The acquisition will double Cargill’s share of the mineral salt cattle feed market, which consists mainly of small companies, to 2 percent, Mello said.

The deal’s terms were not disclosed.

“We plan to grow organically and through acquisitions in the cattle feed segment” in Brazil, Mello said. Integral Nutrição generates about $24 million in annual sales there.

The animal nutrition market grows at a 3 percent to 5 percent rate per year in Brazil, the world’s largest chicken- and beef-exporting nation, according to Mello.

In Brazil, the company’s animal nutrition business grows by 10 percent to 12 percent annually, Mello said.

Earlier this week, Cargill announced a binding agreement to acquire Iowa-based technology company Diamond V to expand its global animal health and nutrition businesses.

Cargill also made a recent investment in Delacon, which makes natural, plant-based phytogenic additives. It expects that deal to give it a leading position in the $20 billion global animal feed additives market.

$1 = 3.2930 reais Reporting by Roberto Samora; Writing by Ana Mano; Editing by Lisa Von Ahn

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