Land O'Lakes And Ceres Agree To Merge; Stock Surges 78%

Land O' Lakes, Inc. and Ceres, Inc. CERE reached a definitive merger deal. According to the deal, Land O'Lakes would acquire all of the outstanding capital stock of Ceres in a transaction worth at about $17.2 million, including amounts payable to holders of certain warrants to acquire Ceres common stock.

The two companies indicated that under the merger terms, Land O'Lakes would commence a tender offer for all outstanding shares of Ceres common stock for $0.40 per share, in cash. The price per share of common stock represents an 81% premium to the closing price of Ceres shares of common stock on June 16.

Once the transaction is completed, Ceres would become a fully owned subsidiary of Land O'Lakes and would complement Forage Genetics International (FGI), a Land O'Lakes subsidiary, and bring new advanced plant breeding and biotechnology to FGI's research and development pipeline.

Land O'Lakes president and CEO, Chris Policinski, commented, "Through our Forage Genetics International business, Land O'Lakes is interested in providing a holistic forage offering to our customers, including alfalfa, corn silage and forage sorghum. The acquisition brings complementary strengths together, adds new advanced plant breeding and biotechnology to the FGI research and development pipeline and accelerates the process of bringing new forage solutions to existing and new markets."

Similarly, Ceres CEO and president, Richard Hamilton, reacted by saying, "Our shift away from bioenergy and Brazil and into forages has been highly successful to date, and is culminating now in this proposed merger transaction with a preeminent leader in forage crops. After evaluating strategic options, our board of directors has unanimously determined that this all-cash transaction, which represents a significant premium from recent trading levels, is in the best interest of the company and its stockholders, and will advance Ceres' mission of making the production of meat and dairy more scalable and sustainable."

The stock traded 72.5 percent higher on Friday.