CHICAGO, May 16 (Reuters) - U.S. crop handler Bartlett and Company, which exports American grain to Mexico, will merge with logistics provider Savage Companies, the firms said on Wednesday, in the latest round of consolidation to hit the struggling agriculture sector.
Officials for Missouri-based Bartlett and Utah-based Savage did not release financial terms or say what prompted the timing of the deal. The transaction is expected to close in August, according to the privately held companies.
Throughout the agriculture supply chain, companies and farmers alike remain under pressure from low crop prices, following years of massive harvests of staples such as corn, wheat and soybeans.
From agrichemical companies to rural farm elevators, businesses big and small have rushed in recent years to merge, establish joint ventures or acquire rivals in a bid to cut costs and stay competitive.
Seed and chemical companies Dow and DuPont combined last year, along with ChemChina and Syngenta. Separately, Bayer AG is close to finalizing a takeover of U.S. seed seller Monsanto Co.
Bartlett has long been known as a mid-sized, family-owned grain buyer in the United States, though it is much smaller than competitors Archer Daniels Midland Co and Cargill Inc .
Bartlett controlled the 20th largest U.S. grain storage network last year, with a capacity of 67.76 million bushels, according to Milling & Baking News, an industry publication. In comparison, ADM’s storage capacity was 468.6 million bushels.
The merger, once finalized, will create a new business named Savage Enterprises, according to the companies. The venture will be led by Savage Companies’ chief executive, Kirk Aubry, and include Bartlett’s grain and milling businesses. The value of the new combined entity was not known.
Savage Companies had no immediate comment on what will happen to Bartlett’s U.S. cattle-feeding business, which Bartlett said is one of the country’s largest.
“Partnering with Savage makes sense logistically and strategically,” Bill Fellows, Bartlett’s CEO, said in a statement.
Savage Companies was established in 1946 and has more than 4,000 employees in North America and Saudi Arabia. It provides transportation and logistics services for oil refineries and other businesses.
Bartlett is a leading exporter of U.S. grain to Mexico, the companies’ statement said. It is more than 100 years old and has about 760 employees working in 11 U.S. states and Mexico, according to its website.
Such family-owned grain companies have been targeted for takeovers, typically by larger companies, said Chris Hurt, an agricultural economist at Purdue University.
“There aren’t many independents that are left,” he said. (Reporting by Tom Polansek; editing by Diane Craft)