ADM Spins Off Crop Insurance Biz

Archer Daniels Midland Company (ADM) announced today that it has reached an agreement to sell its Crop Risk Services (CRS) business to Validus Holdings, Ltd. for $127.5 million, subject to certain working capital and balance sheet adjustments. The sale includes its crop insurance business.

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.

“We regularly evaluate our portfolio to ensure that our businesses and assets best fit our strategy to maximize long-term returns,” said Joe Taets, president of ADM’s Agricultural Services business unit. “As a result of that ongoing process, we have identified a better strategic fit for the Crop Risk Services business.”

The deal, he added, includes 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.

Validus — a international provider of insurance, reinsurance and investment services — has committed to keeping the CRS business intact, including maintaining its operations in Decatur.

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“I’m very pleased to welcome CRS to Validus. CRS is a high quality crop insurance provider that has achieved excellent growth in recent years,” said Ed Noonana, Validus chairman and CEO. “Validus will benefit from CRS’s commitment to provide 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 U.S.”

The sale, which is subject to regulatory review, is expected to close in the first half of 2017. Nearly all ADM CRS employees will transfer with the CRS business at closing. ADM expects to record a book gain upon closing.

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