adm really got smaked down when they disapointed on earings. 6% in one day, way oversold. If regulators would allow it bg could acquire adm pretty cheaply these days. Given the economy of scale and lower management cost bg could add quite a bit of value. Two questions: 1, could bg afford to buy up adm, and 2. would regulators allow it? A merger would make one pretty super giant.
I think both bg and adm are on the acquistion radar. Given the growth prospects both these companies and this sector are in line for acquistion. I watched with interest as bhp made its takeover attempt of pot the fertilizer giant and got blocked by the Canadian government. I thought perhaps bhp with huger earnings to re-invest might diversify into this sector and maybe even bg or adm, but instead went into some shale gas investment/acquisition. Would not be surprised to wake one day and see bg or adm with takeover attempt underway, by some other commodity based company like bhp or one of the oil majors, that have huger earnings they want to re-invest or diversify with. jmho.
I saw some news headline today that says the Canadian government is open to acquistion attempts on Viterra. I thought perhaps they might try to block it like the sale of pot earlier. Think Cargil or soem outfit called Glencore is looking to buy vt.to. Some people thought adm might take a run at it. adm already has a strong presence in Canada. Bottom line is that some of these ag stocks are under-appreciated and this acquistion might be just a beginning leading to these stocks trading at higher p/e.
I see adm is about 2x the size of bg, but if bg could do it, might be a good buy. Given the economy of scale savings a merge of adm and bg should have merit. I do not know if the govt would allow it. The opposite adm buying bg would also make sense for the same reason, but right now i think adm is undervalued in the market, and bg seems to get a premium.