(Company corrects to say it is a top exporter of U.S. grain to Mexico, not the top exporter, in first paragraph.)
By Tom Polansek
CHICAGO, May 16 (Reuters) - Bartlett and Company, which says it is a top exporter of U.S. grain to Mexico, will merge with logistics provider Savage Companies, the firms said on Wednesday, in the latest round of consolidation to hit the struggling agriculture sector.
Officials for Missouri-based Bartlett and Utah-based Savage declined to release financial terms of the deal, which they expect to close in August.
The merger, once finalized, will create a new business named Savage Enterprises, according to the companies. The venture will be led by Savage Companies’ chief executive, Kirk Aubry, and include Bartlett’s grain and milling businesses.
Throughout the agriculture supply chain, companies and farmers alike remain under pressure from low crop prices, following years of massive harvests of staples such as corn, wheat and soybeans.
From agrichemical companies to rural farm elevators, businesses big and small have rushed in recent years to merge, establish joint ventures or acquire rivals in a bid to cut costs and stay competitive.
Seed and chemical companies Dow and DuPont combined last year, along with ChemChina and Syngenta.
Bartlett has long been known as a mid-sized, family-owned grain buyer in the United States, although it is much smaller than competitors Archer Daniels Midland Co and Cargill Inc.
Bartlett controlled the 20th largest U.S. grain storage network last year, with a capacity of 67.76 million bushels, according to Milling & Baking News, an industry publication. In comparison, ADM’s storage capacity was 468.6 million bushels.
Bartlett is exploring a sale of its U.S. cattle-feeding business, which is not part of the transaction, according to Savage.
“Partnering with Savage makes sense logistically and strategically,” Bill Fellows, Bartlett’s CEO, said in a statement.
Savage Companies was established in 1946 and has more than 4,000 employees in North America and Saudi Arabia. It provides transportation and logistics services for oil refineries and other businesses.
The company is expanding in Mexico and expects to benefit from Bartlett’s business networks there, Savage spokesman Jeff Hymas said. He said executives see strong markets in Mexico regardless of what happens with renegotiations of the North American Free Trade Agreement with Mexico and Canada.
“The agricultural markets we serve remain strong and continue to grow,” Hymas said.
Bartlett is more than 100 years old and has about 760 employees working in 11 U.S. states and Mexico, according to its website.
Such family-owned grain companies have been targeted for takeovers, typically by larger companies, said Chris Hurt, an agricultural economist at Purdue University.
“There aren’t many independents that are left,” he said. (Reporting by Tom Polansek; editing by Diane Craft and Bill Trott)