TOKYO: Japanese trading house Marubeni will sell the grains business of its US unit Gavilon to commodities trader Glencore PLC's Viterra arm for US$1.125 billion, plus working capital, Viterra said on Wednesday .
In November, Reuters reported that Glencore and its Canadian pension fund partners were looking at options to expand Viterra in the Americas and Australia.For Marubeni, the sale will mark the end of a painful journey as it booked a series of impairment losses, totalling 120 billion yen, since buying Gavilon for US$2.7 billion in 2013, due to weaker grain prices and market volatility.
"We have struggled also as our acquisition price was too high," he said, adding that the Gavilon grain business was not easily controlled by the Japanese managers. Before the sale, Marubeni will reorganise its group operations, including a transfer of eight of the grain elevators held by Gavilon in the northern United States to Columbia Grain International , another US-based Marubeni unit.