Minnesota Corn Processors shareholders have approved a €400 million merger with agribusiness giant Archer Daniels Midland, linking the top two players in the US ethanol market.
"They have approved it," said Larry Cunningham, an Archer Daniels Midland spokesman. While he did not know the final tally of shareholders, he said it exceeded the two-thirds majority needed to seal the deal.
Cunningham expects the transaction to close in the next few days. He said Archer Daniels hopes to cut costs and improve efficiency by incorporating MCP's operations with Archer Daniels'. But he said the company has to study MCP's business further before determining if any job cuts are ahead.
In July, the MCP board accepted Archer Daniels' offer to buy the 70 per cent of the company, Archer Daniels didn't already own. The soybean processor bought 30 per cent of MCP in 1997.
The combined company will have about 50 per cent of the ethanol market once the merger is completed, according to some industry analysts. Cunningham said the share is a little less than that figure, and that it will fall as more ethanol capacity comes on stream in the coming years. In fact, he said about 60 new plants are being built - none of them by Archer Daniels.
Concentration in the ethanol market has been a topic of discussion in Washington. The antitrust division of the Department of Justice is reviewing the Archer Daniels-MCP merger. In recent months, Archer Daniels executives have expressed confidence that the deal will be approved.
"Both companies have thoroughly reviewed everything with Justice, and I don't think there are any red flags at this moment," said Cunningham.