PARIS, April 28 (Reuters) - France’s InVivo expects to conclude in the next two weeks an agreement to buy rival agribusiness Soufflet, which it sees as a step towards creating a European giant to compete with global crop merchants, InVivo’s chief executive said on Wednesday.
InVivo announced in January it was entering exclusive talks to acquire Soufflet and create a combined group with about 10 billion euros ($12 billion) in sales.
“We should arrive at the signing in the next 10 to 15 days,” InVivo Chief Executive Thierry Blandinieres told reporters.
The deal will then be presented to European Union and national antitrust bodies, with regulatory clearance expected to take three to nine months, Blandinieres said during an online news conference.
InVivo has called on traditional financial partners to help fund the acquisition, Blandinieres said, declining to give details ahead of the signing.
InVivo, a grouping of nearly 200 farmer-owned cooperatives, and century-old family firm Soufflet are among the largest players in the French agricultural sector, the EU’s biggest.
The combined group would be one of the largest cooperative-controlled agribusiness players in Europe and Blandinieres said InVivo’s longer-term aim was to nurture an even bigger European entity to rival the so-called “ABCD” global merchants, denoting Archer Daniels Midland Co, Bunge Ltd , Cargill Inc and Louis Dreyfus Co.
“In our world of merchants and cooperatives, there needs to be the ambition to support the emergence of a real leader of the scale of the ABCDs in the next 10-15 years. This is our motivation beyond the acquisition of the Soufflet group.”
Like global grain traders, InVivo benefited from higher prices and strong demand in the past year. It expected sales and core profit at its trading division to rise 30% in its current 2020/21 financial year to September, Blandinieres said.
Favourable grain trading conditions and strong activity at its garden retail business have helped offset weakness at InVivo’s wine distribution business linked to coronavirus lockdowns and U.S. tariffs, he added.
Soufflet, which is to remain a separate business, is more focused on cereals through trading, flour milling and malt production.
$1 = 0.8284 euros Reporting by Gus Trompiz and Sybille de La Hamaide; Editing by David Clarke and David Evans