Glencore share price dips as miner hints at agricultural unit expansion

Group seeks more agri deals following successful investment in grain business Viterra

Glencore share price dips as miner hints at agricultural unit expansion

Glencore (LON:GLEN) will consider expanding its agricultural operations if the right acquisition opportunity arises, the mining company’s chairman, Tony Hayward, has said.

Profits at Glencore's grain and oilseed business rose more than 300 percent last year, helping to offset declines in oil and metals trading. Earnings were boosted by a bumper harvest in the northern hemisphere and the integration of Viterra, a Canadian grain handling business, with the mining giant. Glencore acquired Viterra for $6 billion in 2012.

“I think Viterra has been a fantastic acquisition for us. And clearly if we can find the opportunity to expand we will,” Hayward told the FT's Commodities Global Summit in Lausanne today. Chief Financial Officer Steve Kalmin also highlighted the company’s lofty ambitions in grains last year. He said in December that Glencore should be added to the crop industry’s ABCD, the informal acronym representing the biggest players in grain trading -- Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc. and Louis Dreyfus Commodities BV.

According to analysts, Glencore would explore potential takeover opportunities in the US, as the group lacks any presence in the world’s largest grains and oilseeds producer and exporter. The country’s soft commodities sector is already fairly consolidated, but medium-size businesses including Scoular Co., Andersons Inc. and Lansing Trade Group LLC are seen as potential targets, Bloomberg today reported, citing unnamed sources familiar with the company’s thinking.

Glencore’ share price fell in afternoon trading today, erasing early morning gains. By 15:38 BST, the stock had declined 0.66 percent to 301.00p.

As of 15:59 BST, Wednesday, 22 April, Glencore Xstrata PLC share price is 300.55p.

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