German grain trader BayWa AG announced that it has agreed to acquire Dutch agricultural commodities trader Thegra Tracomex Group through its Dutch agri-trading subsidiary, Cefetra BV for US$14.9 million.
Located in Oosterhout, in the Netherlands, with subsidiaries in Belgium, Poland, and Ukraine, Thegra Tracomex is an international company involved in trading in grains and their derivatives including barley, corn, oats, rye, wheat, pulses, oilseeds, rice, oils, and dried distiller grains for human consumption, feed and the pet food industry.
The deal by BayWa for the company reflects the expected consolidation within the European sector as smaller, or more specialized traders can’t continue in the difficult market. And is also indicative of BayWa’s three-year strategic plan to diversify into non-exchange traded products while also enacting a performance-based payment scheme for its management team, a BayWa spokesperson revealed to Bloomberg.
“As part of the specialization strategy for our agri-trading division we are extending our functional activity with specialty products to diversify our overall portfolio,” said Klaus Josef Lutz, Chief Executive Officer of BayWa AG. “Thegra Tracomex offers the opportunity to enhance the Groups existing product portfolio within Europe and with a global reach.”
This acquisition is the latest in a year-long string of strategic moves for BayWa following the group’s securing full ownership of Hamburg-based Evergrain earlier this year, an international trader of malted barley that will give BayWa a leading position in the barley sector. BayWa also purchased of UK-based Wessex Grain in November 2015 adding an additional trading volume of 450,000 tons of grain per year.
“The acquisition of Wessex Grain is another step in our strategy to expand in international markets, where BayWa Group is already active,” said Klaus Josef Lutz, Chief Executive Officer of BayWa AG upon the acquisition. “By intensifying our origination business in south and southwest England we achieve a closer relationship to the local farmers and therefore benefit from an improved position to serve food and feed customers both in the UK and in Europe.”
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Lynda Kiernan