Merger of Allenberg and Dunavant Nears Completion
November 3, 2009 The Memphis Business Journal reports that anti-trust approvals are expected in mid-November for the pending merger of Memphis cotton giants Allenberg Cotton Co. and Dunavant Enterprises Inc., according to Louis Dreyfus’s global chief executive Serge Schoen.
Schoen told Dow Jones Newswires Tuesday that Louis Dreyfus, the parent company of Allenberg, is waiting for the final anti-trust approvals in major cotton markets like China.
In August, Dunavant CEO William B. Dunavant III confirmed the two companies were in talks to merge their global cotton operations.
“We’re both very active participants in the world cotton market and both of us believe this is a very positive event for both our companies and the industry,” Dunavant said.
Allenberg CEO Joseph Nicosia said at the time he expected talks to be wrapped up within the third quarter, which ended September 30th.
Dunavant perennially ranked first on Memphis Business Journal’s list of the city’s 100 Largest Private Companies. The list is based on gross revenues and Allenberg surpassed Dunavant for the first time in 2006. Allenberg posted $1.8 billion for the year and Dunavant reported $1.7 billion. Dunavant posted $1.35 billion a year later while Allenberg increased revenues nearly 10 percent to $1.98 billion.
But the industry has vastly changed even since then, which the Dow Jones story alluded to. Specifically, the market has shrunk, in part driven by the rise in synthetics and farmers switching to other cash crops.
Perhaps even more significant were the events of March 2008, when cotton futures spiked from $.84 per pound to $1.09 per pound on the IntercontinentalExchange. The volatility was costly to traders and merchants, with some speculating that hundreds of millions of dollars were lost in a two-day span.
(Story found in original form here.)
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