"It’s not a must-have" - Glencore cools US agri-acquisition talk

12 Dec 2017 | Tim Worledge

Glencore’s CEO Ivan Glasenberg has cooled talk on potential acquisitions in the US agriculture industry during an investor update call Tuesday.

Asked a direct question on the potential for bolstering the company’s footprint in the US agriculture sector, Glasenberg acknowledged that the company lacks infrastructure in the country and is aware of “various companies that we can look at,” with a view towards potential acquisition.

However, there remain opportunities to grow the Glencore business in other parts of the world and the company would not be rushed into buying at any price.

“We will continue to look at it… if we can find something that makes economic sense, we will look at it but it’s not a must-have,” Glasenberg said.

“We can grow the business elsewhere,” he added.

Glencore’s agriculture business is a joint venture with the Canada Pension Plan Investment Board and British Columbia Investment Management Corporation holding a $6.25 billion, 49.99% stake in the business, and Glasenberg acknowledged that the Canada connection brought an added dimension to the dearth in their North American capabilities.

The call focused largely on the company’s expectations for growth within the metals and thermal coal arena, with earnings on course to reach $16.2 billion at current spot and forward prices.

Earlier this year, Glencore was heavily linked to the potential purchase of US grains major Bunge – a move that Bunge resisted before the two companies came to a standstill agreement in October, wherein Glencore agreed to not attempt a hostile takeover.

Bunge’s share price surged in late May 2017 following talk of potential acquisition, leaping from 69.27 on May 18 to hit 83.22 by May 25.