CHICAGO, March 1 (Reuters) - U.S. agricultural merchant Archer Daniels Midland Co struck a deal to buy a stake in corn mills in Russia, the company said on Thursday, as it seeks to broaden its business in the face of a global grain glut that is hurting earnings.
ADM agreed to buy 50 percent of corn wet mills owned by Russia-based Aston Foods and Food Ingredients, according to a company statement. The mills in Ibred and Novlyanka are located near major customers in the Russian food and beverage industry, ADM said.
The deal helps Chicago-based ADM expand its sweetener and starches operations as a global oversupply of food commodities is making it tough for agricultural merchants to turn a profit on their core business: buying, processing and selling corn, soy and wheat.
Mergers, acquisitions and partnerships are seen as potential remedies for the glut if they open up new markets or help merchants operate more efficiently.
On Monday, ADM said it agreed to form a soybean joint venture in Egypt with rival Cargill Inc.
In January, a source said ADM had approached rival Bunge Ltd about a takeover. The companies have declined to comment on the matter.
ADM, Bunge, Cargill Inc and Louis Dreyfus Co together are known as the “ABCDs” and dominate the grain industry. (Reporting by Tom Polansek Editing by Frances Kerry)