Oilseed processor Bunge Ltd. announced that it's buying Corn Products International Inc., a maker of ingredients used in beverages and breakfast cereals, for
$4.2 billion in stock and assumed debt on Monday. The acquisition has Bunge paying $56 per share in its own stock for Corn Products, a 21% premium to Corn Products' closing share price of $42.90 on Friday.
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The Deal's Peter Moreira
writes:
That premium will be welcome to Corn Products shareholders,
who've suffered through the company's stock trading in a range in the
last year after tripling in the previous four years.
Corn Products makes foodstuffs from corn and other starch-based
products and counts soft drink giants Coca-Cola Co. and PepsiCo Inc.
among its customers. The company recorded a profit of $64.3 million in
the first quarter of 2008. Meanwhile growing demand for its products has helped Bunge's stock advance 53% over the last 12 months. Bunge saw its first quarter profits multiply 20-fold to $289 million as record-setting grain prices made demand for its crop nutrients and distribution services surge, the company said in April.
The Deal's Bill McConnell
writes:
Driven by rising global demand for corn, wheat, soybeans
and other crops, U.S. farm net income in 2007 reached record levels,
and 2008 is shaping up to be just as profitable. Net farm income in
2008 is forecast by the U.S. Department of Agriculture to hit $92.3
billion, up 4.1% from farm earnings last year and 51% above the 10-year
average of $61.1 billion.
Bunge closed at $122.17 on Friday, and on Monday it raised its 2008
earnings forecast range by more than $2 per share.
- George White
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