Anderson, Clayton and Company facts for kids

Anderson, Clayton and Company was a very important company that started by trading cotton. It was founded in Oklahoma City on August 1, 1904, by three partners: Frank Anderson, Monroe Anderson, and William Clayton. The company later moved to Houston, Texas, in the early 1900s. Houston was becoming a major port for shipping cotton, especially after a big hurricane in 1900 damaged Galveston, another important port. Over time, Anderson, Clayton and Company grew to be the largest cotton-trading company in the world!

In 1986, a well-known food company called the Quaker Oats Company bought Anderson, Clayton and Company. This meant the company was no longer traded on the stock market, and its offices in Houston closed.

The Company's Journey

How It All Began

Anderson, Clayton and Company officially started as a partnership on August 1, 1904. The founders were Monroe Dunaway (M. D.) Anderson, his brother Frank E. Anderson, and Frank's brother-in-law William L. "Will") Clayton. In 1905, Will's younger brother, Benjamin Clayton, joined the team. Benjamin was known for being an expert in how things were moved by trains and ships. The company moved its main office to Houston, Texas, in 1916. This move gave them much better access to a large shipping port, which was great for their cotton business.

Growing Big in Cotton

The company grew a lot during World War I because there was a huge need for cotton. By 1944, Anderson, Clayton and Company had become the biggest supplier of cotton in the world. They owned cotton oil mills and cotton gins (machines that clean cotton) in many different countries. In 1945, the company became a public company, which meant people could buy shares of it. They also helped cotton farmers in several states by providing money to grow their crops.

Helping Others: The M.D. Anderson Legacy

Monroe Anderson passed away in 1939. He left money to start the M.D. Anderson Foundation. This foundation later helped create the University of Texas MD Anderson Cancer Center by matching money from the state of Texas. The people in charge of the Anderson Foundation wanted the new cancer center to be built in Houston, close to the company's headquarters. The Cancer Center first started in old World War II buildings, but it grew into a very important part of the Texas Medical Center.

Expanding into Foods

As the company got bigger, it started to do more than just cotton. It began to sell food products and expanded into international markets. Some of the well-known brands they owned included Chiffon margarine, Gaines Pet Foods (for pets), and Seven Seas salad dressing. Anderson, Clayton and Company also bought big parts of food companies in Brazil and Mexico. However, their profits from these international businesses were sometimes hurt when the value of money in those countries changed a lot.

Challenges and Changes

While the food businesses were often successful, some other companies Anderson, Clayton bought did not do well. For example, Ranger Insurance Company lost money for several years. In 1985 alone, it lost a huge amount of money, about $58.8 million. Anderson, Clayton tried to sell Ranger, but no one wanted to buy it. This caused the parent company to have its worst financial year in a long time.

By 1986, there were rumors that other companies might try to buy Anderson, Clayton. To prepare, Anderson, Clayton started selling some of its valuable assets to get more money. They sold American Founders Life Insurance Company for $58.7 million. A warehouse and trucking company was sold for $22 million. They also sold their food businesses in Brazil and Mexico to a company called Unilever for $109.1 million.

The Quaker Oats Acquisition

On September 29, 1986, news came out that the Quaker Oats Company would buy Anderson, Clayton and Company. This deal was worth about $812 million. Another company, Ralston Purina Company, had also wanted to buy Anderson, Clayton and had offered a similar amount. However, the U.S. Justice Department had to approve such big mergers to make sure there wasn't a monopoly. All three companies (Anderson, Clayton, Ralston Purina, and Quaker Oats) were major competitors in the pet food market in America. Anderson, Clayton made the Gaines brand pet food. Ralston Purina was already the biggest pet food company, and if they bought Anderson, Clayton, they would control 35 percent of the market. Quaker Oats, which made the Ken-L Ration brand, only had 8 percent of the market before the merger. After buying Anderson, Clayton, Quaker Oats would have 15 percent of the market. The Justice Department had already given its initial approval to Quaker Oats' offer.