Japanese trading house Mitsui has agreed to acquire a minority stake in Dubai-based agri trader ETG Group with an investment of US$265M, aiming to expand its presence in Africa.
According to the deal, ETG would buy back shares equalling a 30% stake from ETG founders Pembani Remgro Infrastructure Fund and Standard Chartered Private Equity, which it would transfer to Mitsui by the end of March 2018, GAI News reported on 21 November.
ETG is active in originating and trading sesame seeds, pulses and other agri products, alongside fertilisers, agrochemicals and seeds.
According to Mitsui, the acquisition aligned with its strategic plan, announced in 2014, to increase its agri trading volumes by 25% within three years to establish the firm as a serious competitor to the dominating ABCD group of Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus in the global agri sector.
The growth plan called for Mitsui to increase its Chinese sales from 3.6M tonnes to 4.9M tonnes and to double the volumes traded in the Middle East and North Africa to 2.2M tonnes, the firm’s head of grain trading Hiro Hidaka told AFR in February 2014.
Mitsui would gain ETG’s origination capabilities, vehicle fleet, warehouse facilities and a sales network connection small villages where ETG had already built up a good reputation.
The acquisition followed Mitsui’s May purchase of Top Seeds 2010, a global vegetable seed company focusing on research, production and marketing of hybrid vegetable seeds, GAI News wrote.
In October 2015, Mitsui also acquired a 50% stake in US non-GMO soyabean breeder and handler Bluegrass Farms for US$50M.