Glencore said to consider sale of Australia malt unit Joe White
2013-03-14 12:08:24
Glencore International Plc (GLEN), the largest publicly traded commodity supplier, is considering a sale of its Australian malt unit and is working with Bank of America Corp., said two people with knowledge of the matter.
The Joe White Maltings division, the largest producer of the grain in Australia, may draw interest from agricultural companies including Ridley Corp. as well as brewers and private equity firms, one of the people said, asking not to be identified as the process is confidential. Glencore bought Joe White as part of its C$6.1 billion ($5.9 billion) purchase of Canada’s Viterra Inc. last year.
The Swiss trader, led by Chief Executive Officer Ivan Glasenberg, is trimming assets after expanding through acquisitions such as the proposed $33 billion all-share bid for Xstrata Plc. (XTA) Malting barley futures have dropped 7.3 percent in the past year on NYSE Liffe in Paris.
Representatives for Viterra and Bank of America said they couldn’t immediately comment, while Ridley Chief Executive Officer John Murray wasn’t available, his assistant said.
Ridley, based in Melbourne, provides rural services and owns stockfeed mills which produce animal feed, according to its website. In November, it agreed to sell most of its Cheetham Salt Ltd. unit to billionaire Li Ka-shing’s CK Life Sciences International (Holdings) Inc. for A$150 million ($155 million). Ridley had A$517 million of assets as of June 30, data compiled by Bloomberg show.
Viterra obtained the malt unit in 2009 as part of its A$1.6 billion purchase of ABB Grain Ltd., Australia’s largest barley exporter. Joe White produces more than 550,000 metric tons of malt a year from seven plants, according to its website. Customers include brewers in countries including Singapore, Japan, Thailand, Vietnam, South Korea and Indonesia.
Malt, a form of barley, is used to brew alcoholic drinks such as beer and whiskey. Australia accounts for about 32 percent of the world’s malting barley trade, according to Barley Australia. The country produces more than 850,000 tons of malt annually, with more than 500,000 tons exported, according to the group’s website.