Cargill gets foothold on Romanian market

US group Cargill on Wednesday took over the main stake in one of Romania’s main grain storing companies, Comcereal Alexandria, under a transaction worth 824bn ROL ($26m).

Cargill, one of the world’s largest processors and distributors of agricultural products, is now controlling all the Romanian-based grain storage facilities.

The transaction was operated through a public offer run on the RASDAQ market and was reported yesterday. The main shareholders of Comcereal (US investment fund Broadhurst and Financial Investment Company Oltenia) have already announced that they subscribed on the offer.

Broadhurst got about 630bn ROL ($19 million) for its 68% stake in Comcereal Alexandria. “We have sold our entire stake during the offer launched by Cargill. We are satisfied with the benefit yielded by our investment in Comcereal,” Siminel Andrei, head of the investment fund’s manager NCH Advisors, told Ziarul Financiar. Siminel would not reveal the exact yield, but, according to market sources, the US fund more than doubled its four-year investment.

SIF (Financial Investment Company) Oltenia held 20.7% in Comcereal and will cash 184 billion ROL ($5.7 million) for its stake.

Analysts expect the financial investment company to report profit worth 112 billion ROL ($3.5 million) following this transaction, as the Comcereal shares had a face value of 25,000 ROL in the SIF’s accounting books. The Americans paid 64,227 ROL for each share.

According to market sources, Comcereal was bought mainly for its sunflower storage and processing facilities, since the world has been facing a significant sunflower deficit for the past few years. Consequently, many companies selling or processing agricultural materials are trying to overcome the crisis by taking over the storing facilities located near the big agricultural areas.

Comcereal Alexandria resulted from the absorption of another three companies (based in Galati, Giurgiu and Slobozia), where Broadhurst had bought the main stakes in the past few years. The minority shareholders of Comcereal also comprised SIF Banat-Crisana, SIF Muntenia, the European Drinks group (controlled by the Micula Brothers), Rompac International and the InterAgro group (controlled by businessman Ioan Nicolae). vlad.nicolaescu@zf.ro