Bunge to Purchase 70-Percent Interest in IOI Loders Croklaan

Sept. 15, 2017
The deal will expand Bunge's product offerings worldwide, accelerate growth of the company's oils business and build on sustainability commitments.

Bunge Ltd., White Plains, N.Y., announced on Sept. 12 it has entered into a definitive agreement to acquire a 70-percent ownership interest in IOI Loders Croklaan from IOI Corp. Berhad for $946 million, comprising €297 million and $595 million in cash. The transaction expands Bunge’s value-added capabilities, reach and scale across core geographies to establish Bunge as a global leader in B2B oil solutions, according to the company.

Loders, is an established oil supplier in the growing $33-billion semi-specialty and specialty B2B oils market. Its portfolio includes palm and tropical oil-derived products with strength in confectionery, bakery and infant nutrition applications. The Channahon, Ill.-based company serves global food industry customers in more than 100 countries and reported fiscal year 2016 revenues of $1.6 billion.

"This is a compelling transaction for Bunge," said Soren Schroder, Bunge’s CEO. "Together with Loders, we will have a comprehensive product offering derived from seed and tropical oils, with leading innovation, application capabilities and sustainability programs. This complete seed and tropical oil portfolio will position Bunge to be a full service partner and uniquely able to help our customers innovate and grow for the future. We are excited about the benefits that this combination will create for Bunge’s shareholders, as well as for the employees, customers and business partners of our companies. The key capabilities that the talented employees of Loders bring in customer intimacy, market knowledge and application development will be a competitive advantage for the combined business. We look forward to welcoming the Loders team to Bunge."

In addition to strengthening Bunge’s food and ingredients business with a broader product portfolio, the deal will diversify Bunge’s manufacturing and R&D network across core geographies, such as establishing a stronger presence in fast-growing Southeast Asia. Bunge says it will also gain an enhanced footprint in Europe and North America. After closing, Loders will have exposure to new markets where Bunge has a strong presence, including Latin America and India.

Bunge states it expects Loders will generate $105 million of EBITDA in 2018 on a stand-alone basis, plus the transaction is expected to result in $15 million in cost synergies in year one.
Together, Bunge and Loders say they're committed to sustainable sourcing, including zero-deforestation, zero peat conversion, protection of human rights, traceability and transparency. Bunge intends to continue its work as a member of The Forest Trust, increasing the sustainability of its supply chain and collaborating in projects that help advance industry performance. Finalizing the transaction, Bunge intends to base its palm oil sourcing on Loders’ policy.

Loders will retain its brand and operate as part of Bunge’s Food & Ingredients business with key management team members expected to remain with the combined business.
The transaction is expected to close in the next 12 months, subject to customary closing conditions, including receipt of required regulatory approvals and the approval of a majority of IOI shareholders.

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