Grain farmers in the South West are deciding on whether to accept an offer from agricultural group Cefetra to buy Somerset-based farmer-owned business Wessex Grain.
The board of Wessex Grain has unanimously approved the takeover offer and 268 farmer shareholders from Dorset, Somerset, Wiltshire and Devon have until 13 November to respond to the bid, which needs approval from 75% of its stakeholders.
Simon Wilcox, Wessex Grain managing director, said the deal would ensure Wessex Grain shareholders would see an immediate cash return but that it would also ensure that it retained and enhanced its position as a strong regional grain buyer on the back of Cefretra’s access to key markets within the UK and across Europe.
“We have been working for them for a while and only last week we had some surplus milling oats that we needed to move and Cefeftra were able to find a market in the Mediterranean.
“This is a good deal. Cefetra are paying a premium price for the business and they understand our strengths,” he told Farmers Weekly.
Andrew Mackay, Cefetra managing director, said: “We see great potential with the two companies working together and we plan to build upon the success of our existing distribution agreement to expand both the tonnage and the range of operations for Wessex Grain.”
Cefetra Ltd is a Dutch firm and part of the German owned BayWa company, which has 16,000 staff.
Cefetra’s principal trading interests are in supplying raw materials to the feed, food, and fuel industries.
It trades about 20m tonnes of agricultural commodities a year, with the supply of raw materials for animal feed accounting for more than 90% of its activity.
It bought feed merchant McCorkell (Scotland) Ltd in 1999 and is a major importer of grains and animal feed raw materials into the UK and Ireland.
Wessex Grain was founded in 1980 as a farmer co-operative and in the past 35 years has grown to be one of the top 10 grain traders in the UK and the South’s largest independent grain merchant.
It recently invested £2.5m in its store at Henstridge, Templecombe, Somerset, increasing capacity to 70,000t, including a single 17,000t flat store.
If the takeover goes ahead, the storage business will be in a separate co-operative run by a farmer board.
The company trades about 450,000t/year of combinable crops with its ex-farm trading covering a large geographical area, stretching from Cornwall to Sussex, northwards to Buckinghamshire and then back across to south Wales.
Farmers commenting on online forums about the bid were generally positive about it, saying it would open up further exports markets to farmers in Europe and provide additional security for Wessex Grain.