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TheStreet Open House

Bunge To Purchase Grupo Altex Wheat Mills In Mexico

Stock quotes in this article: BG

ST. LOUIS, Mo., Oct. 23, 2013 /PRNewswire/ -- Bunge North America, the North American operating arm of Bunge Limited (NYSE: BG), announced that it has agreed to buy the wheat milling business of Grupo Altex S.A. de C.V.  Financial terms were not disclosed.  The purchase is expected to close by the end of the year subject to regulatory approval and customary closing conditions.

A leading Mexican wheat miller, Grupo Altex operates six mills with an annual processing capacity of approximately 800 thousand metric tons.  It produces a broad portfolio of products from many varieties of wheat including bread flour, prepared flours for baked goods, tortillas and pizza and semolina for pasta.  These mills are well placed to serve Mexico's key population centers and will complement Bunge's existing wheat milling business, Harinera La Espiga, to provide nationwide coverage to key flour customers.

"This investment further strengthens our core food and ingredients segment by building on the consistent success of our North American milling business," said Gordon Hardie, managing director, Food & Ingredients, Bunge Limited.  "Grupo Altex has an experienced team, efficient assets and an innovative product portfolio that will provide a solid platform for profitable growth in a compelling market."

In addition to the mills, Bunge is acquiring Grupo Altex's product brands and its innovation center.

"Grupo Altex shares Bunge's approach of focusing on quality and service as we partner with some of the world's most well-known food companies to protect the integrity of their products," said Todd Bastean, president and CEO, Bunge North America.  "By leveraging our Mexico milling assets with our wheat origination capabilities in North America, we can provide customers with an efficient, reliable supply chain."

Jose B. Avalos, executive vice president of Grupo Altex stated, "We are confident that the sale of the wheat milling business to Bunge, while not an easy decision, is in the best interest of our key stakeholders, particularly our customers and employees. Bunge is well placed to grow the business.  The proceeds from the sale will be utilized to strengthen our position in the fruit and vegetable processing businesses, fully in line with our strategic plan."

Bunge was advised by Rothschild and Rabobank on the transaction.

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