ADM to sell its crop risk services business for $127.5 million

CHICAGO, US: Archer Daniels Midland Company (ADM) has reached an agreement to sell its Crop Risk Services (CRS) business to Validus Holdings Ltd (VR) for $127.5 million.

The deal includes a marketing services agreement under which ADM and Validus will work together to continue to offer a full range of insurance and farmer marketing products and services to CRS customers.

Validus is a leading global provider of insurance, reinsurance and investment services, with over 800 employees and offices in all major regions worldwide has committed to keeping the CRS business intact, including maintaining its operations in Decatur.

The deal is expected to close in the first half of 2017. Nearly all ADM CRS employees will transfer with the CRS business at closing.

“We’re pleased to have reached an agreement that benefits ADM on two fronts: it includes a marketing services agreement that will allow ADM and Validus to work together to continue to offer customers a full array of crop insurance products as well as ADM’s grain marketing services, while the sale of the business gives us the opportunity to redeploy capital as part of our balanced capital allocation framework. We look forward to continuing to work with Validus and the CRS sales team and their customers across the country. This is a good solution for ADM, our shareholders, the CRS team, and the farmers who are the foundation of our business,” said Joe Taets, president of ADM’s agricultural services business unit.

“CRS is a high-quality crop insurance provider that has achieved excellent growth in recent years. Validus will benefit from CRS’s commitment to providing superior customer service to agents and farmers via their leading technology capabilities. The addition of CRS complements Validus’ existing agriculture book and participation in this market is a logical step as Validus continues to expand our presence in US primary speciality lines,” added Ed Noonan, chairman and CEO, Validus.

Read More: ADM to sell its crop risk services business for $127.5 million