Land O’Lakes to buy Ceres, focuses on forage development


Land O’Lakes proposal to acquire Ceres is in keeping with current trends, says academic.

The proposed $17.2m deal was announced earlier this month and, if completed, would make Ceres a wholly owned subsidiary of Land O’Lakes. 

Ceres develops biotechnology for agricultural use and has generated and marketed new seeds and traits for feed crops, forages and other markets. It has been focusing on developing products that answer production challenges including marginal soil quality, and the need for increased yield and feed crop quality.

The proposal has been approved both by the Land O’Lakes Board of Directors and the Ceres Board of Directors, the companies said. It is predicted to be finalized in Q3 2016 and will be funded with cash on hand.

The California-based company is of interest in terms of the synergies it is said to bring to Land O'Lakes existing forage operations through subsidiary, Forage Genetics International (FGI).

"Land O’Lakes is interested in providing a holistic forage offering to our customers, including alfalfa, corn silage and forage sorghum,” said Chris Policinski, Land O’Lakes president and CEO. “The acquisition brings complementary strengths together, adds new advanced plant breeding and biotechnology to the FGI research and development pipeline and accelerates the process of bringing new forage solutions to existing and new markets.”  

Richard Hamilton, CEO and president of Ceres, said the deal would advance the biotech company's goal of making the production of meat and dairy more "scalable and sustainable".

'Trying to keep up'

Thomas Jeitschko, professor in the department of economics at Michigan State University, said the deal is not surprising given the amount of recent M&A activity in the agri-business space.  

Although proposed mergers of larger companies like Monsanto and Bayer or Dow and DuPont may gather more attention, companies like Land O’Lakes have to position themselves strategically and practically in the current market, he told us.

Industry analysts said the move shows small, profitable firms will be targets for the larger businesses that are trying to keep up with the ever increasing scale of multinationals in agri-business.

And a larger company will often enhance a small business in the additional R&D resources it brings to the table: “You might have a company with innovative researchers and good ideas, and they can do the foundation, but don’t have the infrastructure to bring [certain types of products] to market,” he said.

But there are some questions about whether the amalgamation of Land O'Lakes and Ceres would face a challenge from the regulator due to the fact there are already large companies in the space that are also looking to consolidate said Jeitschko. 

The merger might also mean fewer options for customers, he added. Generally competition among a larger group of companies in an area means more options and lower prices, said Jeitschko.

Related News


US farmers campaign against Dow Chemical merger wtih DuPont


What will be the model of EU compound feed manufacturing in five years’ time?


Pelleted, treated feeds may boost digestion in growing cattle

© iStock/Manjurul

Land O’Lakes partners with Bidco for feed development in Africa

© iStock/mindscanner

Bayer and Monsanto agree to $66 billion deal

© istock/NiroDesign

Tainted whey ruling challenged in US courts

© iStock/maxuser

Land O’Lakes preps to buy Southern States’ feed business

© iStock/ VladTeodor

US: Washington state dairy producers one target of new perennial forage

© iStock

Fishing by-product boosts cattle intake when added to forage diet

© iStock/DarcyMaulsy

Land O’Lakes: 'Southeast US offers the single biggest growth opportunity'

© istock/BsWei

EU regulatory clearance for $130 billion merger of Dow and DuPont

© iStock

Biotech company raises $5m to improve forage feed quality

© iStock/jowil

US forage and hay exporter partners for Middle East expansion

© iStock/jowil

US cattle producers faced with limited feed production turn to alternative ingredients

Land O'Lakes starts a nutritional additives business ©

US group, Land O’Lakes, launches feed additives business

Purina premix and milk replacers fueling growth at Land O'Lakes

Cargill and Land O’Lakes feed facilities get FSSC 22000 backing

Cargill and Land O’Lakes feed facilities get FSSC 22000 backing

Land O’Lakes suing feed ingredient supplier for alleged whey tampering

Land O’Lakes suing feed ingredient supplier for alleged whey tampering


Delacon in US botanticals deal with Land O’Lakes and PMI

New research facility expands Land O’Lakes’ work in proteins and auto-feeders

New research facility expands Land O’Lakes’ work in proteins and auto-feeders

Land O'Lakes reveals several advantages to feeding milk or milk replacers to calves three times daily

Calves managed aggressively for growth will produce more milk as two-year-olds: Land O'Lakes

Related Products

See more related products

Submit a comment

Your comment has been saved

Post a comment

Please note that any information that you supply is protected by our Privacy and Cookie Policy. Access to all documents and request for further information are available to all users at no costs, In order to provide you with this free service, William Reed Business Media SAS does share your information with companies that have content on this site. When you access a document or request further information from this site, your information maybe shared with the owners of that document or information.