December 16, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

InVivo, a leading French agricultural cooperative group bringing together 192 cooperatives, has completed the acquisition of Soufflet, the largest family-owned grain buyer in Europe, in a deal that values Soufflet at EUR 2.2 billion (US$2.49 billion). 

Soufflet also operates on the international cereals market through its trading subsidiary Soufflet Négoce; is one of Europe’s biggest wheat millers; and is an expert formulator of specialized ingredients, designing enzymes and sourdough. The group also is a major manufacturer of baked goods in France and Portugal, and has a presence in the fast food sector, employing 6,851 people in 19 countries generating 2019/2020 revenues of EUR 4.9 billion (US$5.5 billion).

This deal brings together two of the largest ag businesses in France, and will result in a combined entity with sales totaling EUR10 billion (US$11.3 billion) from everything from grain trading to wine distribution, and is part of a reorganization of InVivo undertaken by CEO Thierry Blandinieres that could see InVivo become a rival to the world’s top grain traders such as Cargill and Archer Daniels Midland (ADM).

InVivo also stated that the new entity will be better placed to withstand stronger competition – both European and international – and will play a key role in InVivo achieving its goal of becoming the world’s top supplier of beer malt ingredients within five years. 

From accounting for 10 percent of the world’s malt market today, InVivo has set a goal to corner 20 percent of the global market through external growth via deals that are already being considered in the U.S., South Africa, Australia, India, and South America. 

To help fund these ambitions, InVivo opened up capital in Malteries Soufflet, Soufflet’s malt division, with leading global investment firm KKR, Bpifrance, and Credit Agricole Group collectively investing EUR 440 million (US$498 million) to acquire a majority stake in the unit. 

“We were looking for a dynamic strategic partner capable of supporting our global growth plans with the acquisition of Soufflet while simultaneously assessing the international growth potential of our malt division,” said Thierry Blandinieres, CEO, InVivo Group. “KKR, along with Bpifrance and Crédit Agricole Group, worked with us to find the right solution to help strengthen our malt division for years to come, in France and internationally.”

Jérôme Nommé, partner and head of France, KKR, added, “Malteries Soufflet is a world class business with the potential to significantly strengthen its position under the expert leadership of Thierry Blandinières and his team at InVivo. We are delighted to work with InVivo alongside other highly respected investors, and look forward to supporting InVivo in growing and developing the malt division to help it meet its exciting growth ambitions.”

However, InVivo is reported to have also leveraged other sources of capital to fund the deal, including a portion of the proceeds from the 2019 sale of its animal feed, feed ingredients, and value-added services provider Neovia to ADM.

The company also made a separate announcement that it had secured a bank loan totaling EUR 1.65 billion (US$1.87 billion) earmarked to partially cover future investments, according to Reuters.

And, just to complicate matters further, InVivo also announced that it was engaged in exclusive negotiations with Avril, France’s fourth largest agro-industry group and oilseed and protein leader, regarding the sale of Soufflet Alimentaire unit – a processing and packaging specialist for rice, pulses, and grain mixes. 

If finalized, this move by Avril would continue the long-lasting partnerships that have existed between Avril, InVivo, and the Soufflet Group, and also reflects Avril’s ambition of becoming the leader in plant-based solutions.

“This project is the result of a major effort and a deep involvement from InVivo, Soufflet Alimentaire and Avril,” said Jean-Philippe Puig, CEO, Avril. “I am particularly pleased with this project which, in line with our development priorities, is fully consistent with Avril’s DNA. Indeed, it would support the consolidation of two major French players committed to the agricultural world and to the development of French agricultural sectors. It perfectly illustrates the ambition of the Group’s raison d’être, Serving the Earth.”

Blandinières added, “This project, a very important symbol for our two groups and the alignment of strategic and financial issues, has been made possible thanks to the work and contribution of the Soufflet Alimentaire teams and Jean-Philippe Puig, CEO of Avril.”

He continued, “Its completion would enable InVivo to accelerate the implementation of its strategic plan, which is now based on adding value to the cereal and wine sectors, on marketing and distribution to the general public, and on innovation and digital technology.”

Moving forward, InVivo and Soufflet’s grain trading activities would operate separately, however, the two parties would share risk strategy while Jean-Michel Soufflet, CEO, Soufflet Group, stays on for a matter of months during the transition until Jean-Francois Lepy, trading chief with Soufflet, takes charge.

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.