Cooperative group InVivo has entered exclusive talks to acquire family-controlled Soufflet in a deal that would create one of Europe's biggest agricultural businesses with €10 billion ($12.17 billion) in sales, the companies said.
The potential tie-up marks a new stage in chief executive Thierry Blandinieres' overhaul of InVivo, a grouping of 192 farmer-owned cooperatives, while heralding the end of the Soufflet family's control over the century-old grain group that bears its name.
'A French Champion'
'The combination of InVivo Group and Soufflet Group would lead to the creation of a French champion in agriculture and agribusiness with an international footprint,' they said in a statement.
The tie-up would allow the groups to combine their international grain trading activities while also bringing together complementary businesses with limited overlap, including Soufflet's flour milling and malt production and InVivo's wine distribution and garden retail, they said.
The enlarged group would be better able to compete with rivals such as US group Cargill and Germany's BayWa .
The deal, under which the Soufflet brand would be preserved, could close by the end of the 2021, they said.
The transaction price was not disclosed.
InVivo said it expected to finance the acquisition through its own funds, bank loans and potentially by selling stakes in some activities to partners.
Organisational Changes
InVivo has in recent years sold its animal nutrition division Neovia to US agribusiness group Archer Daniels Midland, while expanding its garden retail business and entering wine merchandising.
It restructured its grain trading unit after a series of losses, and developed a wheat and barley trading joint venture, Grains Overseas with two other cooperative groups, notably as a response to growing competition from Russia and Ukraine in export markets.
Soufflet, one of Europe's biggest grain handlers, has been the subject of takeover rumours in the past, partly because of the lack of a family successor to take over from Michel Soufflet, board chairman, and his son Jean-Michel, who is chief executive.
InVivo would maintain Soufflet as a separate entity within the group and no asset sales were planned, InVivo said.
Current Soufflet management would stay for a transition period expected to last a few years, it added.
