CHS Interested in Glencore Canadian Ag Assets at Right Price

U.S.-grain handler and farm cooperative, CHS, would be interested in acquiring the Canadian agricultural assets of Glencore, but only if offered at the right price, according to a statement by CHS chief executive, Carl Casale.

Glencore recently made it known that it will be selling a minority stake in its ag business which encompasses assets acquired from Canada’s largest grain handler, Viterra, acquired by Glencore in a 2012 deal worth more than $6 billion.

Since the elimination of Canada Wheat Board (CWB), the last major crop marketing monopoly in the world, in 2012, top players in the global grain handling and trading sectors have been maneuvering to gain a presence in the Canadian market, and Glencore’s pending sale of its Canadian assets is an attractive option, including grain elevators, mills, processing plants, and port facilities across the country.

CHS has been pursuing deals over the past three to four years that act to bolster its core agriculture business, purchasing two ethanol plants in Illinois, a canola processor in Minnesota, an oil refinery in Kansas, and two grain elevators. But because Glencore acquired Viterra at the peak of commodities prices, which have since fallen by half, the cooperative would not be willing to pay top-market prices for the proffered assets due to lower projected returns of the investment.

"They're going to have to be realistic in terms of what the real value of those assets are in today's market,” said Mr. Casale.

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