Agri-business company Olam International has agreed to acquire US peanut sheller McCleskey Mills, in a $176m deal.
The acquisition is in line with Olam's strategy to invest in specific products, including edible nuts.
McCleskey is said to be the third-largest peanut sheller in the US, with 12%market share. It is currently capable of offering over 250,000 farmer stock tonnes of peanuts annually.
Olam International president Anupam Jindel was quoted by BusinessTimes as saying: "Today, the US is the lowest cost producer of peanuts and has the acreage and resources to expand production.
"The US peanut industry has an evolved market structure and is advanced in its seed technology, which helps to keep the industry very competitive.
"We see a steady rise in production and exports in the future to meet the increased demand in emerging markets such as China and India. This provides a clear rationale to invest in US peanut shelling operations and close out an existing gap in our supply chain."
Expected to be completed in the third quarter of fiscal 2015, the acquisition will be funded by a combination of internal funds and existing debt facilities.
Image: McCleskey Mills offers shelled peanuts and seed peanuts. Photo: courtesy of foto76 / FreeDigitalPhotos.net.
