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Cargill is one of America’s most successful companies. It’s also one of its most low profile. Unlike many of the nation’s biggest revenue generators, commodity trader Cargill remains a private company. It’s heavily controlled by family members and prefers to stay out of the public eye, not even releasing full financial statements.
For years, people have wondered if they can invest in this great American success story that grew from a single grain warehouse into an international producer and distributor of agricultural products generating more than $160 billion in annual revenue. The chance of Cargill giving up its privacy and issuing stock to the public looks unlikely. The Cargill family seems determined to continue their private tradition and has the resources to maintain that wish.
Key Takeaways
- Cargill is the biggest private company in the U.S. by revenue.
- The company is largely owned by family members and has succeeded in averting pressure to go public.
- Cargill’s size, assets, ownership structure, and success mean it is likely to remain a private company.
- Investors can buy shares in Cargill’s rivals—Bunge Global and Archer-Daniels-Midland.
Tight Family Control
Since its founding by William W. Cargill in 1865, Cargill has remained a family business. Cargill had two children—a son, Austen, and a daughter, Edna, who married John MacMillan, one of her father’s business partners. The family has since expanded considerably.
In the early days, the company allowed the family to have total control of Cargill. Over time, it diversified away from family management. The year 1960 marked the first time a non-family member became the company’s president.
Ownership, however, has largely remained in the family. According to Forbes, family members own an estimated 88% of the company.
Pressure for an IPO Averted
Some of Cargill’s shareholders have pushed for an initial public offering (IPO) several times. However, because of its massive size and huge assets, Cargill has been able to avert the pressure to go public.
In 1993, it started an employee stock plan that allowed owners of stock to cash in on part of their shares. This kept the pressure of an IPO at bay, with nearly 90% of the company remaining in the hands of the many family shareholders.
Another cry for an IPO came in the late 2000s. Cargill faced pressure from shareholders and charitable trusts that owned stock in the company. In 2011, the company decided to spin off its 64% ownership of The Mosaic Company—one of the largest fertilizer companies in the world. This move allowed shareholders to trade Cargill stock for Mosaic shares.
Massive Size and Success a Factor in Being Private
Cargill generated revenue of $160 billion in 2024, making it by far the biggest private company in the U.S. by sales. It’s also one of the biggest companies in the world. Revenues of $160 billion would put it ahead of China Baowu Steel Group as number 44 on the Fortune 500 list.
Between 2020 and 2023, the company reported profits of about $18.5 billion, which, according to Bloomberg, is nearly as much as it reported in both the 1990s and 2000s combined. Strong financials and generous dividends suggest little need or desire to go public.
Generating cash and accessing capital isn’t an issue. Cargill has an A rating from Standard & Poor’s (S&P) and Fitch as well as an A2 rating from Moody’s. With these debt ratings, it can continue to raise money at low interest rates without needing to seek capital through an equity offering.
$50 to $75 billion
Cargill’s hypothetical value based on the price-to-earnings multiples of its publicly listed rivals.
Publicly-Traded Rivals
While you can’t invest in Cargill, you can invest in two of the company’s largest rivals on the open market. Bunge Global and the Archer Daniels Midland Company are public companies in the food processing and agricultural industries.
As of Nov. 29, 2024, Bunge (BG) and Archer Daniels Midland (ADM) have market capitalizations of $12.53 billion and $26.13 billion, respectively. In 2023, the former reported net sales of $59.5 billion, while the latter reported revenues of $93.9 billion.
Agricultural commodity and food prices are expected to see a marginal price decline in 2024 and 2024, but they’re still expected to remain above pre-pandemic levels. This is driven by an improved supply of many commodities. Certain commodities like cocoa have seen their prices surge in 2024, due to supply restrictions. Fluctuations in these markets play a huge role in the business of these corporations.
Archer Daniels Midland saw itself caught in a scandal in January 2024. Its stock price took a huge hit when word spread about an investigation into its accounting practices. The volatility of rival company share prices amid greater public scrutiny gives Cargill another reason not to want to go public.
Can You Buy Shares in Cargill?
Cargill shares aren’t available to the general public. It is a private, family-owned business. The only exception is employees. Certain people who work for the company can buy ownership stakes through Cargill’s employee stock ownership plan.
Why Did Cargill Never Go Public?
Cargill hasn’t gone public presumably because it hasn’t needed to. Companies generally go public to raise funds and grow. Cargill has been able to do that successfully without giving up its family ownership and privacy.
Who Is the Largest Shareholder of Cargill?
Pauline MacMillan Keinath is rumored to be the biggest shareholder with a 13% stake. She is the great-granddaughter of W.W. Cargill, Cargill’s founder.
The Bottom Line
Most companies eventually go public so that they can continue to grow and fulfill their potential. Cargill has taken a different route and appears to be succeeding. The company likes to stay in the shadows and has the resources to continue that tradition. That’s great for the current owners wanting to keep the business in the family but sadly means the general public cannot buy shares in the company.
