Louis Dreyfus Commodities revealed it stood ready to extend the wave of consolidation among agribusinesses, unveiling a $7bn warchest, underpinned by the trader's first access to capital markets in its 160-year history.
The farm commodities trading giant, which earlier this month agreed to buy US sugar refiner Imperial Sugar for $203m including debt, said it was to spend $7bn building assets and buying companies, following investment of $4.9bn in the 2006-11 timespan.
"We will be certainly making more acquisitions that we have done in the past," Serge Schoen, the Louis Dreyfus chief executive, told the Financial Times newspaper.
The group, which also bought control of Brazil's Santelisa Vale in 2009 to become the world's second largest sugar cane processor and renewable energy group, said it would support its spending by "raising public debt through bonds", with initial round of fund-raising seen at some $500m.
Louis Dreyfus may also list its Brazilian cane operations, but has no plans to follow commodities giant Glencore in flotation of the whole group, the FT coverage indicated.
French-based Louis Dreyfus, when announcing the Imperial Sugar takeover, revealed plans for expansion in the sector, saying the deal was "an important step forward in our plan to grow and diversify our global sugar activities from sugar cane crushing and international sugar trading into sugar refining and distribution in major consumer markets".
The addition of Louis Dreyfus funds would further fuel an agribusiness consolidation wave which has this year seen Glencore buy Canadian grain merchant and agricultural retailer Viterra for Can$6.1bn ($6.1bn) while, among smaller deals, Alpcot Agro bought Ukraine farm operator Landkom.
Marubeni, the Japanese trading house, is in talks to buy US grain trader Gavilon, part-owned by George Soros's Soros Fund Management, for a reported $5bn.
Meanwhile, Bunge, which has unveiled a string of smaller deals in areas such as carbon trading and oil palm plantations, is rumoured to be challenging the likes of Russian investment group Summa for a stake in United Grain, the state-owned grain trader in which Moscow is selling a stake of 50% minus one share.
On Thursday, Astarta, the Ukraine sugar and farming giant, said it was considering "possible acquisitions to secure sustainability, synergy and diversification in [its] development".
Legal challenge ahead?
Louis Dreyfus on Friday launched the tender offer for shares in Imperial Sugar as the next stage of its acquisition of the Texas-based processor, whose board has unanimously backed the takeover.
However, Imperial Sugar stock has opened a small premium to the $6.35-a-share offer, indicating that investors believe a rival offer may appear, or that Louis Dreyfus may be compelled to pay more.
The stock stood at $6.42 on Monday, down $0.11 from Friday's close.
A series of law firms have opened investigations into whether Imperial Sugar executives met their fiduciary duties, and achieved the best sale price, in agreeing the Louis Dreyfus offer.