Archer Daniels Midland Company has agreed to sell its global chocolate business to Cargill for $440m, subject to a customary working-capital adjustment.
The proposed sale is expected to close during the first half of 2015 and is subject to regulatory approval and other customary conditions.
“As part of our ongoing portfolio management, we considered several options to strengthen the returns of this part of our business,” said ADM chairman and CEO Patricia A Woertz. “The sale of the chocolate business helps improve ADM’s returns and will allow us to redeploy capital for higher-return investments.”
Approximately 700 employees will transfer to Cargill with the sale.
At the time of closing, ADM will be ending cocoa processing operations at Hazleton, Pennsylvania. This will result in the elimination of about 90 positions at that location. ADM will offer affected employees severance packages and outplacement assistance.
Following the transaction, the 1,560 employees of ADM cocoa will continue to supply customers around the world with ADM’s deZaan cocoa ingredients from the company’s cocoa operations in:
Cargill received clearance for the acquisition from the European Commission in July 2015, at which time Cargill Cocoa and Chocolate North America president Bryan Wurscher said: “The acquisition underlines Cargill’s commitment to meeting our customers’ needs and constitutes a milestone for our chocolate growth strategy, strengthening our position as a leading player in the cocoa and chocolate industry. The new organisation will deepen our service to chocolate customers and expand our footprint and production capability significantly. Customers will benefit from a combined business with a broad range of high quality cocoa and chocolate products for confectionery, bakery, dairy, and other applications.”
And Jos de Loor, president of Cargill’s cocoa and chocolate business in EMEA and Asia, added: “We are looking forward to bringing together people with a deep passion, experience and commitment to producing excellent chocolate in our extended chocolate operations. Growing our business goes hand in hand with our commitment to securing the long-term viability of a strong and sustainable cocoa bean supply chain. With the Cargill Cocoa Promise, we are supporting progress towards a transparent cocoa supply chain, enabling farmers to achieve better livelihoods and delivering a sustainable supply of cocoa and chocolate products to meet the growing demands from customers.”
© FoodBev Media Ltd 2024