This is forwarded from the Wall Street Journal. Note the
brief reference to handling of GMO grain. kate
> Farmland, Cenex Conduct
> Talks on Possible Merger
> By SCOTT KILMAN
> Staff Reporter of THE WALL STREET
> Farmland Industries Inc. and
> Cenex Harvest States Cooperatives, the nation's two
> biggest farmer-owned cooperatives, are in talks to merge
> into one organization that would handle the business of
> half of America's farmers.
> The combined cooperatives would
> generate annual revenue of roughly $20 billion,
> processing everything from wheat to pigs, and be owned by
> roughly 900,000 farmers located between the Rocky
> Mountains and the Appalachian Mountains.
> The talks, which the cooperatives
> disclosed yesterday, are subject to approval by federal
> regulators and their farmer-owners. No cash would
> exchange hands and the combination would be handled as a
> merger of equals. Shares in a new organization would be
> issued to farmers on a 1-for-1 basis for their existing
> shares, the cooperatives said. Farmland, of Kansas City,
> Mo., and Cenex Harvest States, of St. Paul, Minn., each
> have a book value of roughly $3 billion.
> Farmland, Cenex in Talks to Merge
> Grain Operations (March 10)
> The talks are the latest move in
> a merger wave sweeping through the U.S. agricultural
> sector, which is being battered weak exports and low
> commodity prices. Everything from seed companies and
> grain handlers to fertilizer makers are consolidating for
> a number of reasons.
> Regulatory Concerns
> A political backlash is slowing
> the regulatory clearance of several deals. Some
> farm-state legislators are worried, for example, about
> how Cargill Inc.'s proposed acquisition of the
> grain-handling operations of longtime rival Continental
> Grain Co. would reduce the number of buyers for crops
> across the Midwest.
> A combination between Farmland
> and Cenex Harvest States probably wouldn't generate the
> same level of concern by regulators, because they are
> owned by the farmers who would be most affected.
> Farmland and Cenex Harvest States
> began talking about combining their grain-handling
> operations in March. The discussions grew from there.
> Harry Cleberg, Farmland's chief
> executive, said the cooperatives could save tens of
> millions of dollars annually on transportation by
> coordinating their use of trucks, rail cars and barges.
> The cooperatives might save money by eliminating some
> duplicate grain-handling operations.
> The combined organization would
> be better able to coordinate the growing and processing
> of genetically engineered crops, a hot area in
> agriculture. Mr. Cleberg said he is interested in forming
> an alliance between the combined cooperatives and a crop
> biotechnology company such as DuPont Co. or Novartis AG
> of Switzerland.
> Directors of the cooperatives
> said they hope to complete a merger between Farmland and
> Cenex Harvest States by June 1, 2000. Mr. Cleberg and
> Noel Estenson, the chief executive of Cenex Harvest
> States, would serve as co-CEOs of the combined
> cooperative for a while. However, a single CEO would
> eventually be picked.
> Both Messrs. Cleberg and Estenson
> are 60 years old. If the deal goes through, the
> combined cooperatives will hire companies to help them
> decide where in the Midwest to locate their joint
> headquarters as well as how to pick a new name.
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