Malteries Soufflet, a subsidiary of the French agribusiness InVivo, acquires United Malt Group Ltd for AUD 1.5 billion (about USD 1 billion), the company reported today. This follows the announcement made by Malteries Soufflet three months ago, in which it advised that it had made a non-binding, indicative and conditional proposal to acquire all of United Malt’s shares. (inside.beer, 27.3.2023)
The deal will create the world's leading malt producer, enabling Malteries Soufflet to expand its geographical footprint and explore new markets, including China and Oceania. Thierry Blandinieres, the Chief Executive of InVivo, highlighted the strategic nature of the deal and expects its completion around October, offering substantial opportunities for market share growth and overall industry development.
The acquisition is still subject to several conditions, including approval from Australia's Foreign Investment Review Board (FIRB), the support of United Malt's shareholders through a favorable vote, and other regulatory requirements.
Following the announcement of the acquisition, United Malt's shares witnessed a remarkable surge of 9.1%, reaching AUD 4.8 during early trading, closing in on the offer price of AUD 5 per share. This cash offer represents an impressive premium of 45.3% over United Malt's closing price of AUD 3.44 on March 24, prior to the public disclosure of the proposal.
Graham Bradley, Chairman of United Malt, expressed the board's unanimous belief that the offered price appropriately reflects the value of the company's assets and its positive near-term earnings outlook. As a result, the board has recommended that shareholders vote in favor of the acquisition.
United Malt currently holds the position of the fourth-largest commercial maltster globally, producing annually 1,26 million tons of malt in 12 processing plants in Australia (3), the United States and Canada (5), and Britain (4). This complements very well as Malteries Soufflet already has a strong presence in the malting industry with 28 malthouses in Europe, Latin America, Asia and Africa producing a total of 2,36 million tons of malt.
The combined entity will have 40 processing plants with a combined yearly capacity of 3.62 million tons of malt clearly ahead of the current number one, Boortmalt, with about 3 million tons of malt a year, and Malteurop with about 2.3 million tons.
This acquisition aligns with InVivo's strategic goal of achieving a global malt market share of 20%. (inside.beer, 9.12.2021). InVivo entered the malting industry when it acquired family owned French agribusiness Groupe Soufflet two years ago (inside.beer, 6.5.2021). Earlier this year, InVivo entered into an agreement to acquire Castle Malting, a Belgian specialty Malthouse (inside.beer, 2.1.2023). InVivo aims to further boost malt volumes organically as part of its growth strategy. In April, Soufflet announced to invest EUR 56 million in constructing a new malt plant with an annual production capacity of 60,000 tons of malt per year near the Bulgarian city of Pleven. Production is expected to begin towards the end of 2024. (inside.beer, 13.4.2023)