Sept. 2 (Bloomberg) -- Cargill Inc., the largest closely held U.S. company, agreed to acquire Archer-Daniels-Midland Co.’s chocolate business for about $440 million to increase production in North America.
The deal is expected to close in the first half of next year, subject to regulatory approvals, Chicago-based ADM said today in a statement. ADM said in April that it had abandoned plans to sell its entire cocoa business as prices for the beans improved and would instead try to sell the chocolate operations. Cocoa prices have risen 31 percent in the last year as demand surpasses supply, increasing costs for chocolate makers.
“We considered several options to strengthen the returns of this part of our business,” ADM Chairman and Chief Executive Officer Patricia A. Woertz said in today’s statement. The sale “helps improve ADM’s returns and will allow us to redeploy capital for higher-return investments.”
Woertz in April said ADM had extensive negotiations with a potential buyer for the sale of its global cocoa and chocolate business and couldn’t reach an agreement that met the company’s objectives. ADM then decided to sell its global chocolate business and keep its cocoa presses, she said.
For Cargill, the acquisition broadens Cargill’s chocolate operations in Europe and particularly production in North America, according to a statement. Included in the sale are plants in Pennsylvania, Wisconsin, Ontario, the U.K., Belgium and Germany.
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