DOJ Requires Substantial Divestitures In Zen-Noh Grain Elevator Buy

The Department of Justice announced on Wednesday, June 2, that it will require Zen-Noh Grain (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.

The Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the US 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 (Viserion) or an alternative acquirer approved by the US. Viserion’s management team has substantial experience in the grain industry.

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

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