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DOJ: Zen-Noh must divest 9 grain elevators in Bunge deal

The U.S. Department of Justice will require Zen-Noh Grain Corp. (ZGC) to divest nine grain elevators in order to proceed with its proposed US$300 million acquisition of grain elevators from Bunge North America Inc.

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Company in talks with Viserion to sell off facilities

The U.S. Department of Justice will require Zen-Noh Grain Corp. (ZGC) to divest nine grain elevators in nine geographic areas located in five states along the Mississippi River and its tributaries in order to proceed with its proposed US$300 million acquisition of 35 operating and 13 idled grain elevators from Bunge North America Inc.

The Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed merger. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the department’s competitive concerns.

“American farmers produce the crops that feed our nation and the world,” said Acting Assistant Attorney General Richard Powers of the Justice Department’s Antitrust Division. “Without this comprehensive divestiture, many American farmers would have faced lower prices for the corn and soybeans they produce. The divestiture of these assets protects vital competition in our nation’s agricultural industry.”

According to the complaint, the defendants are two of only a small number of competing grain purchasers in nine geographic areas. Without the required divestiture, the combined company likely would have been able to pay less for grain and lower the quality of services offered to farmers. The divestiture ensures that the buyer of the grain elevators will be well positioned to compete vigorously with the merged company in the purchase of corn and soybeans in the affected markets, preserving competition for the benefit of farmers in Arkansas, Iowa, Illinois, Louisiana and Missouri.

The divestiture required under the settlement would, if approved by the court, require ZGC to sell the grain elevators to Viserion Grain LLC or an alternative acquirer approved by the United States. Viserion’s management team has substantial experience in the grain industry.

In a statement on its website dated April 1, Zen Noh said it had entered into an agreement with Viserion for Viserion to acquire 11 of its grain facilities, in anticipation of the U.S. Justice Department’s requirements in connection with the Bunge agreement. The initial agreement between ZGC and Bunge included 35 operating assets. To help secure regulatory approval, eight Bunge assets (Shawneetown, Illinois; Huffman, Arkansas; Osceola, Arkansas (Riverside and Landside); Helena, Arkansas; Lake Providence, Louisiana; McGregor, Iowa; Lettsworth, Louisiana) and three of ZGC’s affiliate, Consolidated Grain and Barge Co. (CGB), assets (Caruthersville, Missouri; Cottonwood Point, Missouri; Savanna, Illinois) have been selected for divestiture and are pending sale to Viserion.

Zen-Noh Grain Corp., headquartered in Covington, Louisiana, is the U.S. subsidiary of the National Federation of Agriculture Cooperative Associations of Japan, Zen-Noh. Zen-Noh Grain Corp. trades and exports corn, soybeans, sorghum, wheat and byproducts from its export elevator in Convent, Louisiana, to Japan and other global markets.

According to Feed Strategy’s Top Feed Companies database, parent company JA Zen-Noh is the world’s 15th largest animal feed producer and the largest in Japan. It produced 7.2 million metric tons of feed at its 22 feed mills in 2020. It produces feed for poultry, pigs and ruminants.

Bunge North America Inc. is the North American arm of Bunge Ltd. Bunge North America is headquartered in Chesterfield, Missouri. Its operations include grain origination, grain processing and grain trading.

Viserion Grain LLC is owned by Viserion International Holdco LLC, a Colorado-based global agriculture merchant formed with the financial backing of Pinnacle Management L.P. Pinnacle is a US$3.2 billion private, New York-based alternative asset management firm that maintains a focus on global commodity markets and trading.

As required by the Tunney Act, the proposed settlement, along with a competitive impact statement will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Robert Lepore, Chief, Transportation, Energy and Agriculture Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street NW, Suite 8000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the final judgment upon finding it is in the public interest.

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