Agricultural commodities trader Bunge Ltd said on Tuesday it will sell 35 of its interior U.S. grain elevators to Zen-Noh Grain Corporation, dramatically reducing its grain origination network in the United States.
Financial details of the sale with the subsidiary of Japan's Zen-Noh Group were not disclosed, and the deal is subject to customary closing conditions and regulatory approvals, Bunge said.
Although the sale will significantly reduce the number of Bunge grain storage and handling assets in the United States, Bunge said "certain supply agreements" with Zen-Noh will result in a "larger and stronger origination and distribution network."
Before the sale, Bunge owned 158 grain storage facilities globally, according to regulatory filings.
Bunge will retain ownership of its bulk grain export terminal in Detrehan, Louisiana, and its jointly owned EGT Grain export terminal in Longview, Washington. It will also retain ownership of elevators in its Bunge-SCF Grain joint venture and elevators in Indiana that supply its Morristown soybean processing plant.
"This transaction will allow Bunge to operate more efficiently and re-invest in higher returning areas of the company while reducing costs and strengthening our balance sheet," Bunge CEO Greg Heckman said in a news release.
Bunge has been cutting costs and shedding non-core assets in recent years as a sharp downturn in grain prices has squeezed margins for the two-century-old global agribusiness giant.
The company ended its 13-year ownership interest in an Iowa ethanol plant in January and sold its Brazilian margarine business in December.
(Reporting by Karl Plume in Chicago; Editing by Raju Gopalakrishnan)