Archer Daniels Midland (ADM) announced it is advancing its strategic plan to transform its portfolio with the acquisition of Neovia, a global provider of value-added animal nutrition solutions, for €1.535 billion (US$1.8 billion).
Under the terms of the exclusive discussions, the acquisition would give ADM control of Neovia’s 72 production facilities across 25 countries, 11 R&D centers in six countries, and its headquarters in Saint-Nolff, Brittany, France.
“The acquisition of global leader Neovia would represent a transformative step for our Animal Nutrition business, and a major strategic investment in France,” said Juan Luciano, chairman and CEO of ADM.
Founded in 1954, Neovia is majority owned by French agricultural co-operative, InVivo, and produces and sells a range of animal nutrition solutions, with business lines in premix, aquaculture, value-added services, pet care, additives and ingredients, and complete feed. Global sales for the company topped €1.7bn (US$2 billion) last year – the vast majority of which came from outside the U.S. and Western Europe – making Neovia’s footprint highly complementary to ADM’s and placing ADM in the position to create a leading global presence in the animal nutrition space.
Neovia is a major global provider of animal nutrition solutions with significant operations in Western Europe, South and Central America, and Southeast Asia,” said Luciano. “Combining Neovia’s global presence and product and innovation expertise with our own growing Animal Nutrition footprint and capabilities would create one of the world’s leading animal nutrition providers, capable of offering complete solutions for customers around the globe—and would be the ideal platform for future growth.”
Over the past four years ADM has undertaken a broad restructuring of its 115-year old business; shifting its focus along the supply chain away from commodities and toward the end-customer through value-added and specialty products and services.
“This is an important addition, not only for our animal nutrition business, but for our entire integrated Nutrition platform,” said Vince Macciocchi, ADM’s senior vice president and president, Nutrition. “In recent years, health and wellness trends in human nutrition—such as clean-label, natural ingredients, and innovative solutions—are being echoed in animal nutrition. With Neovia, we will have global capabilities that span human and animal nutrition, expanding our reach and enhancing internal efficiencies. From colors and flavors to enzymes and bioactives, our new integrated nutrition platform will offer an unparalleled array of ingredients and solutions to meet customer needs.”
Not Alone
ADM is not the only one of the four, global A-B-C-D commodity traders to re-imagine its business in the face of a difficult commodity market in recent years.
In 2015 Cargill made a bold move, acquiring global salmon feed leader EWOS for €1.35 billion (US$1.6 billion), launching Cargill into a leadership position in the global aquaculture feed space. That same year the company also announced the building of a $30 million shrimp feed facility in Ecuador through a joint venture with Naturisa.
Cargill then went on to announce its strategic partnership with Delacon, the pioneering global leader in phytogenic (plant-based) feed additives – through an unspecified minority equity investment. Although the financial details of the deal were not disclosed, Chuck Warta, president of Cargill Premix and Nutrition, told the Star Tribune that the investment was the largest investment to date by Cargill in the area of natural animal feed.
Very quickly thereafter, Cargill acquired Iowa-based Diamond V, a leading global producer of natural animal feed additives, for an undisclosed amount. That same month, Cargill announced its entrance into the Brazilian animal feed space with the acquisition of cattle feed producer, Integral Animal Nutrition.
Other moves in the company’s string of divestments of lower-margin assets included the sale of its ag-retail unit to Calgary-based Agrium; the sale of its condiments business to Ventura Foods; its exit from the crop inputs business in Central and Eastern Europe; and the sale of its U.S. pork business to JBS USA in 2015 for $1.45 billion.
And it’s not just commodity traders that have their eye on nutrition assets for growth. In December 2015 private equity firm Resource Partners announced its majority buyout of leading Polish producer and supplier of industrial poultry, swine, and cattle feed Golpasz S.A., and in September 2016, UK-based Wheatsheaf Group made a strategic investment in GrowSafe Systems, a Canadian agtech startup that improves livestock nutrition, health, and wellbeing.
-Lynda Kiernan