ADM raises US$94.6 million to increase stake in Singapore’s Wilmar

Thu Aug 24, 2017 - 9:10am GMT+0000
ADM, Wilmar
ADM raises US$94.6 million to increase stake in Singapore’s Wilmar

ADM, Wilmar

Archer Daniels Midland (ADM), an American food processing company has raised its stake in Singapore’s agribusiness group Wilmar International in order to step up its exposure to the high-demand Asian food market.

SGX-listed Wilmar revealed that ADM has purchased 40 million shares at S$3.2257 per share in the agricultural company, totaling to S$129 million (about US$94.67 million). This will increase its stake from 24.3 percent to 24.9 percent.

The shares were purchased from Wilmar’s co-founder and former executive deputy chairman Martua Sitorus who will now step down in April to become a non-independent, non-executive director of Wilmar International.

On the other hand, Juan Luciano, ADM’s chief executive will sit on Wilmar’s board. Headquartered in Chicago, ADM has been consistently increasing its stake in Wilmar since 2009. In March 2016, the company has raised its stake up to 20 percent by acquiring shares from Sitorus for close to US$200 million.

As a matter of fact, the two companies’ relationship dates back to their days operating soybean crushing joint ventures in China.

But aside from soybeans, ADM is also the largest corn producer. It primarily makes food, fuel, and feed from corn but over the years, the company has also been diversifying beyond its home market and grow in Asia, one of the fastest growing regions with increasing food demand.

Meanwhile, Wilmar has assets in soy crushing, edible oil refining and packaging, palm plantations, palm refineries, biodiesel production, specialty fats and oleochemical fatty acids throughout Asia.

The company recorded a profit of US$60.2 million for the second quarter this year at June 30. It also experienced a net loss of US$220.1 million in the same period last year due to higher non-operating gains arising from its investment securities.