ADM buys Toepfer grain

Big French agricultural co-operative group InVivo, which has been a partner with ADM in Toepfer International for about four years, is selling its one fifth stake for marginally more than its book value.

The 95-year-old German-based Toepfer trades about 53 million tonnes annually through its Hamburg office and 36 supporting divisions worldwide.

It rates as one of Australia's notable second tier grain marketing business, originally established in Australia in partnership with Elders about seven years ago, and now operating independently as a grain accumulator with State based offices and Elders providing an agency conduit to farmers.

ADM, which was blocked last year in its attempt to make a controversial $3 billion takeover of big eastern Australian grain business GrainCorp, has held a majority stake in Toepfer since 2002.

ADM chairman and chief executive officer Patricia Woertz said ADM had benefited from its big investment in Toepfer for more than a decade and full ownership would allow it to strengthen this business.

Toepfer had an important presence in "critical origination areas as well as growing destination markets", she said.

It would be fully integrated into ADM's global origination network.

"We are committed to ongoing portfolio management to realise value from our businesses and to deploy our capital where it can best improve returns," Ms Woertz said.

There has been no indication from ADM if it will use the full Toepfer acquisition as an alternative avenue to expand its presence in the Australian grain market in the wake of last year's setback.

ADM also still holds a 19.8pc stake in GrainCorp.

Like Elders in Australia, InVivo is set to remain a strategic business partner for the Toepfer/ADM business in Europe.

InVivo, with an ownership structure including 223 regional co-operatives, is the biggest co-op group in France and one of Europe's biggest, generating about $9.1b in turnover last year.

Much of its focus is on grain trading, agronomy and seed production services, animal nutrition services and production of animal health products.

Meanwhile, ADM has also confirmed it will sell its fertiliser blending businesses in Brazil and Paraguay to the Mosaic Company - the biggest potash and phosphate marketer in the US - for almost $380 million.

ADM also intends to push ahead with the sale of its chocolate business, while retaining most of its cocoa processing operations.

"We had extensive negotiations with a potential buyer regarding the sale of our global cocoa and chocolate business, but in the end we could not agree to an outcome that met ADM's objectives," Ms Woertz said.

"Instead, ADM is moving ahead with a process to sell our chocolate business while retaining most of our cocoa press operations, positioning us to realise the greatest overall value from these businesses.

"Each of these transactions will help ADM continue to improve returns and create shareholder value."