Cargill reveals $134bn revenue, snaps up poultry co. Sanderson

US-headquartered Cargill, one of the world's largest US agriculture players, has released its 2021 annual report and revealed it made $134.4 billion in revenue, representing a 17% increase over last year.

The report, simply titled “Extraordinary” follows reports from news outlet Bloomberg released on Friday, that Cargill made around $5 billion in net income during its 2021 fiscal year through to the end of May.

That figure represents the most profitable year to date in the company’s 156-year history, the news publisher pointed out, with the report based on financial documents shown to Bloomberg reporters.

On Monday, it was also divulged through a press release on Cargill’s website that it was teaming up with Continental Grain Company to acquire Sanderson Farms.

The acquisition of Sanderson Farms, one of the top three largest poultry producers in the United States, is expected to close at around $4.5 billion USD, approximately $203 per share, an 11% premium to Friday’s closing price.

Cargill is already one of the largest US beef processors and is the C in the so-called ABCD of giant agribusinesses, alongside ADM, Bunge and Louis Dreyfus. 

Although market uncertainty has been the backdrop across all protein markets, overall protein prices have remained well supported, with the price of chicken - which is known as an affordable protein - being no exception.

For the company, it is a good time to invest.

As stated in the announcement, “Upon completion of the transaction, Cargill and Continental Grain will combine Sanderson Farms with Wayne Farms, a subsidiary of Continental Grain, to form a new, privately held poultry business”.

Wayne Farms’ CEO, Clint Rivers, will lead the combined business.

The new venture will include processing plants and prepared foods plants with operations across Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, and Texas.

With Sanderson Farms becoming a private company, shares will no longer be traded on NASDAQ upon deal completion.

The deal is expected to conclude by the end of this year, or early 2022 upon approval from Sanderson Farms stockholders and “other closing customary conditions.”