Canada Pension Plan Investment Board (CPPIB)-affiliate Glencore Agriculture UK announced Tuesday that it has acquired UK-based animal feed product supplier Mercury Commodities for an undisclosed sum.
Mercury has been Glencore Agriculture’s sole soyabean product supplies agent for the last 18 months and the transaction was designed to expand Glencore’s animal feed business, according to the statement.
“This represents the next phase in the development of Glencore Agriculture UK’s commitment to support the entire farming sector,” said Glencore Agriculture UK managing director James Maw.
“We offer the security of dealing with a well-established and financially-secure international business, whilst also offering reliable local contacts and unrivaled experience of the animal feed product industry within the expanding UK operation.”
The acquisition includes Mercury’s employees, a deep-water terminal and 50,000 tons of modern handling and storage facilities located on Isle of Portland near Dorset, England. The facility will be used to import animal feeds from Glencore Agriculture’s global crop processing facilities elsewhere and facilitate supply of grains into the UK domestic market, according to the statement. Maw added that Glencore plans to expand those facilities.
Glencore Agriculture UK is part of Glencore Agriculture, which originates, handles, markets and processes agricultural commodities through a network operating across 35 countries. The company buys from producers and farming cooperatives when possible and its customers include food manufacturers, animal feed manufacturers, government purchasing entities and others.
Glencore Agriculture’s owners are the parent diversified natural resource company Glencore, the C$298.1 billion ($221.25 billion; €206.56 billion) CPPIB and the C$121.9 billion ($90.47 billion; €84.47 billion) British Columbia Investment Management Corporation (bcIMC).
bcIMC acquired its 9.99 percent stake in Glencore last June for $625 million, months after CPPIB announced that it had agreed to purchase a 40 percent stake in Glencore Agricultural Products for $2.5 billion in April 2016.
“As an asset class, agriculture is an excellent fit for a long-term investor like CPPIB, and we are excited about the opportunity to acquire a significant stake in Glencore Agri, a leading agricultural business,” said Mark Jenkins, at the time senior managing director and global head of private investments at CPPIB and since hired as global head of credit for the Carlyle Group, on the occasion of CPPIB’s investment in Glencore Agri.