Louis Dreyfus, Olam in merger talks to form $15-bn trading giant

European commodity trader Louis Dreyfus Commodities (LD Commodities) and Singapore's Olam International Limited have initiated talks which could lead to a possible merger of the two to create a global giant in commodities trading to take on rival industry leaders Cargill Inc, Archer-Daniels-Midland Co, and Bunge Ltd.

In a statement to the Singapore Stock Exchange Friday, Olam confirmed that the company had engaged in preliminary discussions with Louis Dreyfus in relation to a possible business collaboration, which may take the form of, among others, a merger.

Further, it said that the discussions are still preliminary and that no definitive agreements in relation to the possible collaboration have been entered into as at the date of this announcement, and the possible collaboration may or may not proceed.

The combination of LD Commodities and Olam would have a market value of approximately $15 billion and the new entity would be the world leader in trading cotton, rice, and coffee and also will have a substantial share of the market in wheat, corn, sugar, cocoa, and oil seeds.

Geneva, Switzerland-based LD Commodities is one of the world leaders in the processing of diverse range of commodities. It is part of the privately held Robert Louis-Dreyfus trust and approximately 20-per cent employee owned.

The Group has presence in 55 countries in five continents and has approximately 34,000 employees. Its turnover for 2009 was $34 billion.