Greencore confirms approaches for malt trade

GREENCORE Group confirmed yesterday that it has had a number of approaches that could lead to the sale of its international malt business.

The group produces 500,000 tonnes of malting barley annually from its seven plants in Ireland, England Scotland and Belgium.

As Europe’s third largest malt producer it is seen as an attractive buy for major European players who supply the drinks industry.

Recent speculation has linked Greencore Malt to the two major players in the sector in France – Soufflet and Axereal.

Cargill and possibly Malteurop have also been linked to the group.

The Irish Examiner understands Soufflet is the frontrunner to buy the business and that a price of €120m has been discussed.

Chief executive Patrick Coveney told the Examiner on Monday that it has not had an offer for the business and would not add further to that, other than to say there would be no statement on the sale of the business when the group announces its annual results next week.

Analysts suggested yesterday they considered the price of €120m low, but given the turmoil in the market, suggested the group might be glad to exit the industry if given the opportunity at this time of uncertainty for the sector.

Against this background, the group issued a statement to the markets yesterday that it has recently had a number of unsolicited approaches for its malt business from international ingredients companies with largescale malting businesses.

“These approaches are being explored. However, at this stage there can be no certainty that a transaction will be forthcoming”, it said.

As a result of the global recession the malting sector has come under severe pressure with over supplies due to the fall in alcohol consumption driving prices down significantly.

Greencore enjoyed a very good year in 2007 when the global economy was at its peak and demand for malt was very strong.

For some time it has said it wants to focus on food and its move into the convenience food business in the US last year signalled its commitment to developing that sector in the years ahead.

It expects sales of $1bn in five years out of the US to match its European turnover at that point.

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