July 27, 2018
ADM announces acquisition of Neovia for EUR 1.5 billion
Archer Daniels Midland (ADM) has announced plans to purchase a French global provider of value-added animal nutrition solutions firm, Neovia for €1.5 billion (more than US$1.747 billion) in a 100% cash deal.
Neovia consist of 72 production facilities and a presence 25 countries with its headquarters in Saint-Nolff, France. The acquisition will offer geographic expansion on three continents as well as state-of-the-art innovation capabilities and a diversified product portfolio.
"This move represents a transformative step for our animal nutrition business and a major strategic investment in France," Juan Luciano, chairman and CEO of ADM, said.
"At ADM, everything starts with the farmer, and we are eager to deepen our relationships with French farmers and French agriculture as we bring together the resources, technologies and expertise of two great companies. We look forward to working with them to leverage their global presence, integrated value chain and world-class innovation to reach new markets and new customers together.
Luciano continued, "It is a major step as we continue to execute the value creation strategy we first outlined in 2014. Neovia is a major global provider of animal nutrition solutions, with significant operations in Western Europe, South and Central America, and Southeast Asia. Combining Neovia's global presence and product and innovation expertise with our own growing Animal Nutrition footprint and capabilities would create one of the world's leading animal nutrition providers, capable of offering complete solutions for customers around the globe - and would be the ideal platform for future growth."
Established in 1954, Neovia manufactures and sells a wide range of nutrition solutions for the feed industry. It also operates in business lines, which includes premix and value-added services, pet care, additives and ingredients, aquaculture and complete feed.
Currently, majority of the company is owned by leading French agricultural cooperative group, InVivo and has extensive innovation capabilities with 11 R&D centres in six countries. In 2017, its global sales tallied up to €1.7 billion (more than US$1.98 billion).
However, Neovia has a limited presence in the US, with more than 75% of its sales coming from outside Western Europe, which complements ADM's footprint.
"This transaction is a great opportunity for both Neovia and ADM to establish what will be a global leader in animal nutrition solutions. ADM will pursue partnerships with French cooperatives and reinforce its relationships with the French agricultural world. At the same time and in line with our strategy '2025 by InVivo', the sale of Neovia will enable us to accelerate our transformation by favouring investments in our growth levers: agriculture, agribusiness & wine, and retail & digital, in France and abroad," Thierry Blandinières, CEO of InVivo, shared.
"This is an important addition, not only for our animal nutrition business but for our entire integrated Nutrition platform," Vince Macciocchi, ADM's senior vice president and president, nutrition explained.
"In recent years, health and wellness trends in human nutrition - such as clean-label, natural ingredients, and innovative solutions—are being echoed in animal nutrition. With Neovia, we will have global capabilities that span human and animal nutrition, expanding our reach and enhancing internal efficiencies. From colours and flavours to enzymes and bioactives, our new integrated nutrition platform will offer an unparalleled array of ingredients and solutions to meet customer needs," Macciocchi added.
Transforming its extensive 115 years portfolio over the last four years, ADM has added premix and aquaculture capabilities in Asia and built new modern facilities in North America in its animal nutrition business.
ADM also combined its human and animal nutrition businesses into a single business unit that offers complete nutrition solutions earlier this year. Subject to process and regulatory approvals under the French law, the acquisition is expected to close by the fourth quarter.