Miller Magazine Issue: 122 February 2020

41 NEWS MILLER / FEBRUARY 2020 Louis Dreyfus boss is open to selling stake After 169 years of keeping the business in the family, agricultural commodity giant Louis Dreyfus Company (LDC) is open to selling a large non-controlling stake to an external stakeholder, its chairwoman told Reuters. Marga- rita Louis-Dreyfus, who assumed control of the company in 2009, stressed she was in no rush and that an investor would have to strengthen the business. Last year, the billionaire businesswoman completed consolidating Louis Dreyfus Com- pany Holdings B.V. (LDHBV) - the structure that holds the family’s shares in LDC - via her Akira family trust which now controls over 96% of the holding firm. She has spent a de- cade negotiating costly and acrimonious bu- youts of minority family shareholders, while profits at LDC declined in increasingly tou- gh agricultural markets. “It is the first time in our almost 170-year history that we are prepared to open our capital to an external shareholder,” the 57-year-old said in an in- terview. “But we are not under pressure. We want to keep majority control. Everything else depends on the quality of offers.” The group has previously indicated it could bring “re- gional players” into the business to help strengthen its positions in areas where it seeks expansion, such as China. LDC, also known as Dreyfus, is the “D” of the “ABCD” quartet of global agri-traders that also includes Archer Daniels Midland (ADM), Bunge and Cargill. Like its pe- ers, LDC has restructured operations, exiting activities including dairy and metals trading while focusing more on food processing, notably in Asia. The company’s top priority was to develop its business, said Louis-Dreyfus, a Russian-born Swiss citizen. “Until 2018 we were in a process of consolidating the company’s shareholder structure. Now the company is free of that is- sue and can fully focus on the business.” A new investor should bring value to strengthen the company, she said. Speculation about consolidation has been rife in the in- dustry since takeover approaches for U.S.-ba- sed Bunge. Commodity group Glencore made an approach for Bunge two years ago and has said the sector needs consolidating. China’s COFCO International has also been seen as a potential bidder for other trading firms as it expands overseas. In October 2019, Dreyfus reported a first- half net profit from continuing operations of $73 million, down from $91 million a year earlier, and said international trade tensions and the swine disease epidemic would wei- gh on its annual profit. Louis-Dreyfus said it would show a “resilient” bottom line despite a challenging backdrop of swine fever and trade ten- sions, which depressed U.S. soybean imports into Chi- na. “We are adapting to a new reality of higher vola- tility and political unpredictability,” Louis-Dreyfus said, adding that a recovery of crush margins — the profits made from processing soybeans — and cost savings should help 2020 results. A cost-cutting programme announced internally in November is being led by new Chief Operating Officer Michael Gelchie, whose appo- intment was part of a recent management reshuffle, the latest in a series of changes. REUTERS Margarita Louis-Dreyfus