Marubeni nears $5 billion-plus Gavilon deal: sources

Mon May 28, 2012 6:43pm EDT
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By Emi Emoto and Soyoung Kim

TOKYO/NEW YORK (Reuters) - Japanese trading house Marubeni Corp (8002.T: Quote) is nearing a deal to buy U.S. grains merchant Gavilon for more than $5 billion including debt and could announce the transaction as early as Tuesday afternoon in Tokyo, according to people familiar with the matter.

Marubeni, Japan's fifth-largest trading company, has been in advanced talks to buy Gavilon since early May. The Japanese company has confirmed its interest in Gavilon but said no decision had been made.

Although the deal is pending final approval, the proposed terms value Gavilon at more than $5 billion including debt, and Marubeni has lined up financing for the deal, said the sources, who asked not to be named since the deal has not been announced.

A valuation at that level would be in line with the proposed terms the two sides have been discussing since early this month. People familiar with the matter told Reuters previously that Marubeni has offered to pay $5.2 billion for Gavilon, including assuming some $1.7 billion of debt the U.S. grain trader had at the end of December.

Representatives of Marubeni and Gavilon could not immediately be reached for comment.

Marubeni had earlier dispatched a team of auditors to Gavilon's Omaha, Nebraska, headquarters to review its operations and finances, sources have said.

In addition, Marubeni President Teruo Asada traveled to New York last week with other executives as discussion of the deal reached the final stages, a person familiar with the trip said.

Acquiring Gavilon would deepen Marubeni's control of grain supplies from North America, the world's top grain export hub.   Continued...

A man walks past a sign of Japanese general trading company Marubeni Corp at the company's head office in Tokyo July 27, 2009. REUTERS/Stringer