Cargill Acquisition Plan Will Face Scrutiny

Cargill Inc. agreed to buy the grain trading business of its rival Continental Grain Co., but the deal immediately raised eyebrows among U.S. and European regulators. Cargill, the largest privately held company in the United States, said it’s buying the unit for more efficient grain handling and better access to world markets, and said it hopes to complete the transaction by April. The acquisition raises antitrust concerns because Cargill’s grain export operation is the nation’s largest and Continental Grain’s is second, with roughly 20% of U.S. crop exports. Agricultural products companies, faced with falling commodity prices and weak demand in Asia, have been consolidating. The Justice Department said it or the Federal Trade Commission will review the proposed deal. In Brussels, industry sources said the European Commission will probably launch its own antitrust investigation because of the European market clout of both companies. Cargill executives don’t see antitrust issues as a problem in the acquisition, a spokeswoman said. Cargill and Continental did not disclose terms of the deal, which is estimated to be worth several hundred million dollars.