World Grain - July 2008 - 10

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Bunge, Corn Products set to merge
WHITE PLAINS, NEW YORK, U.S. - In a move that would combine two of the oldest and largest agricultural businesses in the United States (U.S.), Bunge Ltd. on June 23 announced its intent to acquire Westchester, Illinois, U.S.-based Corn Products International,
Inc. for approximately $4.4 billion, including the assumption of $414
million of Corn Products debt.
As part of the agreement, Corn Products shareholders would receive Bunge stock worth $56 for each share of Corn Products common stock they own - a 31% premium to Corn Products closing
share price of $42.90 on June 20.
Once the transaction is completed, Corn
Products shareholders would own approximately 21% of Bunge. The transaction is expected to
close in the fourth quarter of 2008.
"Combining with Corn Products provides a unique opportunity
for Bunge to establish an integrated, global presence in the corn
value chain, which is highly complementary to our existing operations," said Alberto Weisser, chairman and chief executive officer
(CEO) for Bunge. "Corn Products is the leading pure-play franchise in corn refining and will add higher-margin starch and sweet-

ener products to Bunge's product portfolio, expand our operations
in important growth markets, and diversify our revenue stream with
a solid cash flow business."
Samuel Scott, chairman, president and CEO of Corn Products,
said the transaction represents "a terrific opportunity" for Corn Products to create value for its shareholders.
"Our stockholders will have an ongoing equity interest in a combined company that is well positioned to serve customers around the
world with a broad product portfolio, integrated distribution network
and innovative products," Scott said.
Once the merger is completed, Bunge will
have approximately 32,000 employees and operations in 40 countries. Neither company expects
to close any industrial facilities as a result of the
transaction. Corn Products will maintain its operational headquarters
in Westchester and continue to use the Corn Products brand name.
In 2007, Bunge had net income of $778 million while Corn Products posted net income of $198 million.
Separately, Bunge announced an increase in its 2008 annual earnings
guidance to $9.35 to $9.65 per share from $7.10 to $7.40 per share.

Flooding in Midwestern U.S. shuts down grain facilities
KANSAS CITY, MISSOURI, U.S. - Archer Daniels Midland Co.
(ADM) noted in mid-June that flooding throughout the Midwestern
United States (U.S.) had forced it to temporarily close grain elevators
in Gulfport, Illinois, U.S. and Keithsburg, Illinois, U.S., and a corn
wet mill in Cedar Rapids, Iowa, U.S.
The company also said its soybean processing facility at Quincy,
Illinois, U.S., was forced to operate at reduced capacity due to an inability to transport finished product.
"Throughout our operations in the Midwest, we are experiencing
constrained logistics because of the closure of railways, roadways
and the Upper Mississippi river," ADM said. "The flexibility offered
by our transportation network is helping us overcome some of those
limitations. We are leveraging the geographic breadth of our operating facilities to help meet customer needs."
The Ursa Farmers Co-op, in Warsaw, Illinois, U.S., saw two 60-foot
concrete grain bins collapse. Damage was found in two more bins
that had water encroaching on them from the Mississippi River.
Truman Phillips, co-op general manager, told reporters that each
of the bins held more than 20,000 bushels, and he hoped at least half
of the spilled soybeans could be saved.
Cargill on June 17 declared force majeure on corn syrup supply contracts because flooding had temporarily shut down its Cedar Rapids,
Iowa, U.S., corn milling plant. "This means that Cargill will not be able
to meet all of its customers' contracted volumes, and supply of corn syrup from Cargill will be limited until further notice," the company said.
The action affected only corn syrup, not high-fructose corn syrup,
which is not produced at the Cedar Rapids, Iowa, U.S., plant, the
company said. Force majeure allows a company to stretch shipment
deadlines or not deliver contracted amounts due to events beyond its
control, such as natural disasters.
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"While Cargill is working diligently to minimize the impact on its
customers, it has become clear that the company won't have enough
corn syrup to meet its customers' needs for the immediate future," the
company said. "Cargill will allocate available corn syrup amongst its
customers in a fair and equitable manner, but those who have alternative sourcing options are asked to utilize them until Cargill returns to
normal production."
A Cargill corn milling facility in Eddyville, Iowa, U.S., on the Des
Moines River, remained open but was operating at reduced capacity
because of a lack of rail cars in the state limited corn supply to the
plant, a company spokesman said.
The flooding in the Midwest has the global grains industry wondering what impact this will have on the already strained global
grains supply.
The U.S. Department of Agriculture's (USDA) National Agricultural Statistics Service (NASS) released its 2008 Crop Acreage report on June 30. However, it said that it collected most of the acreage
data during the first two weeks of June, which is before most of the
flooding occurred.
In an effort to more accurately determine how much of the planted
area would actually be harvested for grain, NASS re-interviewed
producers during the week of June 23 in affected areas of Illinois,
Indiana, Iowa, Minnesota, Missouri and Wisconsin. This will provide additional information about producers' harvesting intentions
for corn, soybeans and sorghum.
NASS will conduct a more extensive update of planted and harvested
acreage in July in the impacted areas. This information along with data
normally collected from across the country during this time will be reflected in the Aug. 12 Crop Production report, which should give the eager industry a broader understanding of the full impact of this disaster.
July 2008 / World Grain / www.World-Grain.com

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World Grain - July 2008

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