German grains trader BayWa AG expanded its buying spree with the acquisition of Dutch agriculture company Thegra Tracomex Group.
The Munich-based firm agreed to buy Thegra Tracomex, which trades raw materials for the food, feed and pet industries, for about 14 million euros ($14.9 million), BayWa said by e-mail Tuesday. The purchase will be made through the company’s subsidiary Cefetra B.V., which it bought in 2012.
BayWa Chief Executive Officer Klaus Lutz said earlier this year he expected consolidation in the European agriculture industry, partly as smaller traders may find it harder to survive. The company this year took full ownership of Hamburg-based Evergrain, which specializes in trading malting barley, and agreed to buy Wessex Grain in England.
"We are extending our functional activity with specialty products," Lutz said in a statement Tuesday. "Thegra Tracomex offers the opportunity to enhance the group’s existing product portfolio within Europe and with a global reach."
Thegra Tracomex trades niche commodities including barley, oats and pulses through its offices in the Netherlands, Belgium and Poland. The deal is part of the company’s strategy to diversify into non-exchange traded products and also includes a performance-based payment to management over three years, a BayWa spokeswoman said, declining to provide further details.
Lutz last week said BayWa was in talks regarding the deal announced today.
While the industry has consolidated a lot in countries like the U.K., not much has happened in southern Europe, Lutz said in April. Consolidation will probably also increase as farms in central Europe aren’t big enough to be profitable, he said at the time.