September 14, 2010

AgFeed completes acquisition of M2P2

AgFeed Industries, Inc., one of the largest independent hog production and animal nutrient companies in China, announced on Monday (Sep 13) that it has completed the acquisition of M2P2 LLC based in Ames, Iowa.

M2P2 is a joint venture partner with AgFeed in AgFeed International Protein Technology Corp. (AFIPT), which is focused on introducing the Western model of pork production to China and Asia. The aggregate consideration AgFeed paid to acquire M2P2 is approximately US$25.6 million, which is subject to post-closing adjustment.

In connection with the completion of this acquisition, John Stadler, M2P2's Chairman will become a member of AgFeed's Board of Directors.

Earlier this year, AgFeed announced plans to invest in a hog production project in the Jiangxi province to build five Western model hog farms. The complex will have annual production capacity of up to 600,000 hogs when completed during 2012.

AgFeed has also said it plans to sell 20% of its animal nutrients feed unit in a stock offering as it focuses more on compound and concentrated feed markets, which make up most of China's current expanding production.