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UPDATE 2-Cargill to buy feed maker in high-margin natural foods push

UPDATE 2-Cargill to buy feed maker in high-margin natural foods push
From Reuters - October 24, 2017

CHICAGO (Reuters) - Cargill Inc [CARG.UL] is buying a maker of natural animal feeds, the global commodities trader said on Tuesday, another in a string of deals to capitalize on rising demand for higher-margin natural foods and antibiotic-free meat and dairy products.

The recent push by privately held Cargill, including Tuesdays deal for Iowa-based Diamond V, has centered on its animal nutrition and protein unit, with expansions in feed production and aquaculture and divestitures of its U.S. pork business and cattle feedlots.

Cargill and rivals like Archer Daniels Midland Co (ADM.N), Bunge Ltd (BG.N) and Louis Dreyfus Co [LOUDR.UL], known as the ABCD quartet of global grain trading companies, have moved to diversify amid a global grains glut that has weighed on margins and dragged profits.

As populations grow, theres growth in protein-based diets and feed is important to that, Standard & Poors analyst Chris Johnson said. They have a favorable long term view of the feed industry as a result and have been investing there.

Cargill did not disclose terms of the Diamond V deal, but said it was among the five largest acquisitions in the Minnesota-based companys 152-year history.

Among those deals were a $1.5 billion acquisition of Norwegian fish feed company EWOS and a $1.2 billion deal in 2008 for starch manufacturer Cerestar.

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