Cargill to Purchase Continental Grain

Cargill (Minneapolis) and Continental Grain Co. (New York) have announced today that they have signed a definitive agreement for Cargill to acquire Continental's worldwide commodity marketing business. The transaction includes Continental Grain Company's grain storage, transportation, export and trading operations in North America, Europe, Latin America and Asia. The transaction is expected to be completed in the first quarter of 1999.

Some industry analysts see this deal as giving Cargill a monopoly on grain exporting. A regulatory review will determine if the companies can finalize the transaction. For Continental, the sale offers the opportunity to focus on its other businesses.

"This is a bold strategic move for Continental Grain Company that will enable the company to concentrate our financial and managerial resources on significant opportunities worldwide in our fast-growing, higher added-value agri-industries, financial services and private investment operations," said Continental chairman and CEO Paul Fribourg. "We have the highest respect for Cargill and believe it will provide the right home for our grain business."

"Together these grain operations will extend farmers' reach into new markets and improve service to a world of increasingly demanding customers—and that's what it's all about in today's global marketplace," Cargill CEO and chairman Ernest Micek said. "Continental Grain Company's worldwide grain handling and export facilities will help us move farmers' crops to our processing plants and to our customers more reliably and efficiently."

Continental Grain Company, which is changing its name to ContiGroup Companies, Inc., will continue to be a factor in global agribusiness, a purchaser of agricultural commodities, and a supplier of added-value products through its AgriIndustries division, said Fribourg.

Micek said fundamental changes in the global food and agriculture system are driving changes in companies like Cargill and Continental Grain. "Population growth, rising incomes, urbanization and new technologies are transforming the global food system—making it larger, more open and more demanding," he said. "To serve that changing market, we are taking many steps that help us better link farmers with consumers around the world."