Cargill's Acquisition of Continental Grain's Grain Merchandising Business

Marvin Hayenga and Robert Wisner

Review of Agricultural Economics, 2000, vol. 22, issue 1, 252-266

Abstract: This article examines the advantages and concerns raised from the proposed October 1998 Cargill acquisition of Continental Grain Company's grain merchandising business. The world's largest grain exporter acquiring the second largest exporter raised concerns about potential loss of competition, but also may make these firms with excess capacity more effective in competing for a larger U.S. share of the world market. The analysis below done in December 1998 was based on the quickly available and relevant data to provide information to industry, academic, and government analysts which might prove useful in debating the pros and cons of this acquisition. Subsequently, the July 1999 Department of Justice proposed consent decree and rationale for its settlement with Cargill is summarized, followed by some issues for the reader to consider.

Date: 2000
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