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VeraSun, US BioEnergy merge
$707 million deal makes company largest ethanol producer in U.S.By DEANNA MEYER, Messenger city editor
POSTED: April 1, 2008
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VeraSun sites in Iowa
The merger — effective today — is valued at $707 million, based on stock prices from the day it was first announced in November 2007. The deal consolidates 16 ethanol plants under one corporate umbrella, with 11 currently operating and five under construction.
The merger will not have any impact on operations at the Webster County plant, company leaders have said.
‘‘We are pleased to complete the merger with US BioEnergy and we are well on our way to integrating our companies,’’ said Don Endres, VeraSun’s chief executive officer, in a statement. ‘‘We look forward to realizing the synergies of our combined business, as we expect to reach 16 biorefineries and an operating capacity of more than 1.6 billion gallons by the end of 2008.
‘‘The size and scale that results from this merger will allow us to become more relevant to our customers in the petroleum industry,’’ he continued.
In a previous interview, Gordon Ommen, president and CEO of US BioEnergy, praised the merger, saying it would make VeraSun the ‘‘leading biofuel company in the world.’’
‘‘This is a very exciting transaction that places us in the No. 1 position in the industry,’’ he said.
The combined company will continue to be called VeraSun Energy Corp., with Endres maintaining the position of chief executive officer and Ommen becoming the chairman.
With the merger’s completion, VeraSun owns and operates 10 ethanol production facilities, including the one in Webster County, with seven other sites under construction or development.
Under the agreement, each outstanding share of US BioEnergy common stock will be converted into .810 shares of VeraSun common stock, representing a premium of approximately 11 percent based on Nov. 23, 2007, closing prices. The existing VeraSun shares will remain outstanding and will represent approximately 59 percent of the shares outstanding after the merger.
VeraSun common stock will continue to trade on the New York Stock Exchange under the symbol, ‘‘VSE.’’
Contact Deanna Meyer at (515) 573-2141 or dmeyer@messengernews.net
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View Comments: | 1-3 | Post a comment
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bartath
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04-02-08 6:35 PM
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you are so right Paladin, prices will not go down and demand remains high
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Paladin
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04-01-08 11:05 PM
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The information from the USDA today says planting of corn will go down this year, but that will increase corn prices. Demand remains high. Soybeans will be planted since there is a shortage and prices are up. Crop rotation is also a part of the change in acres of corn planted. Don't expect a reduction in food prices.
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bartath
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04-01-08 10:52 PM
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Based on stock reports I can't see ethanol being around in 5 years. The recent rise in corn, wheat,soybeans and natural gas prices has more than offset rise in ethanol prices. Ethanol prices will be declining in the second half of the year. If a person checks all ethanol stocks they will see they are dropping. USbioenergy gross profit are down from Dec 07 by over 70% and 4th quarter showed a 7.2 million net loss and just right for a take over. When they closed the plant in Minn they lay off 70 and not for rehire. Noting at this time or in the near future will replace oil. We can try to come up with new ideals but ethanol is not the answer. The profit in a gallon of ethanol is also down. We will run out of water to produce ethanol before we run out of oil. Also read the farmers are not planting as much corn this year. If you look around the food prices are coming from corn, wheat and anything we do to make ethanol. 7 months ago the stock price was $21.47 and it's down to $7.25 today.
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