TOKYO, Sept 11 (Reuters) - Global commodities trader Cargill Inc said it has agreed to sell its U.S. metals business to Japan’s Metal One Corp, its latest move to boost its focus on higher-margin food and agricultural businesses.
A deal was signed on Friday and the two parties expect to close the sale later this year, Cargill said on Sunday. It did not give a sale price.
The sale includes steel and iron ore activities based in Minneapolis and Houston, as well as eight processing facilities in seven U.S. cities: Windsor, Colorado; Panama City, Florida; two facilities in Granite City, Illinois; East Chicago, Indiana; Tulsa, Oklahoma; Loudon, Tennessee; and Houston, Texas.
For Metal One, headquartered in Tokyo, the move expands its North American steel footprint. Metal One, owned by Japan’s Mitsubishi Corp and Sojitz Corp, was created in 2003 through the merger of their steel trading and distribution businesses.
Japanese trading houses have been expanding their steel trading and distribution businesses in the United States as demand in Japan is declining amid a shrinking population and slowing economy.
“This acquisition will be a great strategic fit with our current asset base in North America,” said Shuichi Iwata, President and Chief Executive Officer of Metal One.
Privately held Cargill has been streamlining its business to focus on higher-margin operations such as food ingredients and the fish feeding business in a bid to bolster earnings and capitalise on consumer trends.
“While no longer owning steel processing centres, Cargill will continue to be active in global ferrous markets, offering tailored physical supply and financial solutions in iron ore and steel through our business in the Asia Pacific region,” said David Dines, president of Cargill Metals and Shipping.
J.P. Morgan Securities LLC acted as exclusive financial advisor to Cargill on the transaction. (Reporting by Yuka Obayashi in TOKYO and Josephine Mason in BEIJING; Editing by Richard Pullin)