Olam CEO Sunny Verghese stated that there will be an increase in the number of mergers and acquisitions in agribusiness because of the growing imbalance that there will be between the supply and demand for food. One indication of the shift is the growing number of government-linked companies increasingly making deals. In March Singapore-state investment fund Temasek Holdings Pte Ltd as part of a consortium offered Olam $2 billion for the 47.5% it did not already own. Olam, one of the world’s biggest traders in commodities posted its third quarter earnings with a net profit of US$316.8 million –more than double the previous year. Two of the biggest government-linked deals of the past few months have been the purchase of Dutch grain trader Nidera NV and Noble Group Ltd by China’s state-owned grain trader COFCO Corp. The two deals give COFCO, and through COFCO the Chinese government, direct access to grain from South America and Eastern Europe eliminating any middle-men. Another of Asia’s big commodity majors, Wilmar International Ltd offered A1.27 billion for the Australian company Goodman Fielder Ltd which makes breads and dairy products. Goodman Fielder has rejected the bid but Wilmar has also been busy buying a number of sugar assets as prices have fallen. Instead of one business acquiring a second business, the market is shifting toward governments using mergers and acquisitions to buy food security.
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