By Gillian Tan Archer Daniels Midland Co. ADM +2.44% has a market value of US$21.9 billion, but it hasn’t grown by undertaking large scale M&A.
The group’s US$2.5 billion takeover offer for the 80.1% of GrainCorp Ltd. GNC.AU +7.92% that it doesn’t already own, is its biggest acquisition on record, according to Dealogic.
ADM’s previous largest acquisitions were back in 1996, when it paid US$470 million for the U.S. cocoa business and in 2002, when it paid US$396 million for the 70% stake it didn’t already own in Minnesota Corn Processors LLC.
The deal follows a string of other activity in the food and beverage sector, the largest being Joh. A. Benckiser GmbH’s US$10 billion tilt for Dutch company DE Master Blenders, announced earlier this month.
Other pending deals in the sector include Diageo's DGE.LN 0.00% US$2 billion acquisition of a majority stake in India’s United Spirits, which has encountered some hurdles, and Anheuser-Busch InBev's BUD -0.07% deal for Mexico’s Grupo Modelo GMODELO.MX -0.19%.
From an Australian point of view, ADM’s tilt for GrainCorp is the third biggest inbound food and beverages deal behind SABMiller PLC' SAB.LN -0.33%s acquisition of Foster’s Group and Kirin Holdings Co.'s 2503.TO -1.35% acquisition of Lion Nathan.
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