The agricultural trading industry can expect more consolidation at a regional level in an effort to improve margins, but big deals between global merchants are becoming more difficult, Louis Dreyfus Company’s chief executive (LDC) said.
Reuters reports that investor pressure has centered on Bunge, which has drawn interest from both Glencore and Archer Daniels Midland for a potential mega-merger.
But LDC Chief Executive Ian McIntosh is unconvinced on the merits of wholesale tie-ups.
“Each of the participants -- the ABCDs, Gs, Cs, all the various acronyms - are becoming increasingly different businesses,” he said in a telephone interview, referring to the so-called ABCD quartet of ADM, Bunge, Cargill and Dreyfus, along with Glencore and Chinese-owned COFCO International. “Which means that consolidation at total-company level is, I think, increasingly difficult to execute because the business fits have become less obvious.”
Read the full report at Reuters.
