PARIS (Reuters) - French cooperative group InVivo will use 1 billion euros expected from the sale of its animal nutrition business to Archer Daniels Midland to step up investment in new farming techniques and support acquisitions in wine, its chief executive said.
InVivo and ADM announced on Monday exclusive talks over the sale of 100 percent of animal feed business Neovia to the U.S. agricultural giant for 1.5 billion euros (£0.9 billion).
As majority shareholder of Neovia with a 67 percent stake, InVivo, a grouping of French farmer-owned cooperatives, will earn around 1 billion euros from the sale and wants the proceeds to support growth in priority areas of farming techniques, wine distribution and retail, Thierry Blandinieres told Reuters.
The group was aiming to speed up growth of its Bioline business, which develops new farming practices such as bio-control alternatives to pesticides, to reach a target of 1 billion euros in sales by 2022 instead of 2025 as previously planned, he said.
Bioline currently has annual sales of about 350 million euros.
"InVivo is going to pick up 1 billion to invest in French agriculture, that is part of our mission," he said.
The sale of Neovia reflects InVivo's need to maintain a core French focus, Blandinieres said, noting that faster than expected overseas growth at Neovia meant that 80 percent of its sales were made outside France.
InVivo was not interested in keeping a minority share in Neovia as its policy now is to hold majority stakes, and it was reassured by ADM's commitment to continue partnerships Neovia has in France with InVivo cooperative members, he said.
InVivo has already expanded its retail business in France by acquiring gardening chain Jardiland and is looking for overseas acquisitions to boost its wine distribution activity.
Like other agricultural groups including bigger rivals such as ADM, it has been overhauling its grain trading business to overcome losses in recent years.
(Reporting by Sybille de La Hamaide and Gus Trompiz. Editing by Jane Merriman)