Cargill acquires stake in Cerestar

by Emily Wilson
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Cargill, Inc. has agreed to acquire Montedison Group’s 56% share in Cerestar for U.S.$29.70 per share.

Cargill plans to tender for the remaining outstanding shares, which are publicly traded. The $29.70 share price applied to the entire company, together with outstanding debt, puts the Cerestar enterprise value at U.S.$1.1 billion.

Announcing the transaction, Cerestar described the two companies’ starch operations as "extremely complementary" from a geographic perspective. Cerestar is the market leader in the European Union, while Cargill holds the top position in the United States. In addition, Cargill holds a significant market position in Latin America, where Cerestar does not operate.

F. Guillaume Bastiaens, Cargill vice-chairman, described the proposed acquisition as an important element of an agri-foods strategy Cargill has been developing for several years. "Cerestar fits that new agri-foods strategy of Cargill hand- in-glove," Mr. Bastiaens said. "This acquisition bolsters its execution — providing value-added customer solutions, not just ingredients."