Acquisition Divestiture

In an acquisition, it is not uncommon for the acquiring firm to buy more than it is willing to acquire, either because the acquirer does not want all of the target assets, or regulators force the combined company to sell off part of its assets. Glencore announced that it was selling Dakota Growers Pasta Company (DGPC) for $370 million. Glencore had acquired DPGC in December 2012 when it purchased Viterra for $6.1 billion. Since the acquisition, Glencore has sold off several Viterra assets including some Viterra farm retail outlets, and parts of Viterra to Agrium Inc., and Richardson International Ltd. If an acquisition includes plans for the partial divestiture of target firm, be sure to include those cash flows in your analysis.