January 12, 2012

aT Grain to buy US-based grain firm

aT Grain Co., a South Korean joint venture built by state-run Korea Agro-fisheries Trade Corp. (aT), is seeking to obtain a US-based grain firm that specialises in storage and wheat, beans, and corn distribution by H2 2012.

This is the first attempt by a Korean consortium to acquire a private enterprise to enter the North American grain market. The government believes this will facilitate exports of US-harvested wheat, beans, and corn to Korea, and help raise Korea's self-sufficiency rate in food.

'We have appointed a major grain appraiser as a sole consultant, and we are currently conducting due diligence on nine grain companies in the Corn Belt region (the world's largest corn-harvesting region based in the Midwest area of the US),' said an official from the Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF), while adding that the due diligence process is almost complete. 'We will be deciding on an M&A (mergers and acquisitions) target soon, and complete the takeover by the second half this year,' he added.

aT Grain will make two acquisitions, one for a grain storage and distribution company and one for an exporter. Thus, the consortium can secure wheat, bean and corn supplies from the grain company in Corn Belt and utilise the exporter to ship the products down the Mississippi River, through the Panama Canal, and to Korea.

The acquisition will raise Korea's self-procured supplies of grain from current 10% to 30% by 2015, said aT.

aT Grain is a joint public-private venture established in Chicago, the US, under the government's initiative. It is valued at US$2.5 million and is owned 55% by aT and 15% each by private firms Samsung C&T, STX, and Hanjin Transportation.