Cargill close to buying Archer Daniels Midland's cocoa business
03 Oct 2013
US crop giant Cargill Inc is close to buying Archer Daniels Midland Co's (ADM) cocoa business worth $2 billion.
Cargill, one of the world's leading cocoa traders, is in the final stages of buying ADM's cocoa business, Reuters yesterday reported, citing sources familiar with the situation.
Cargill and ADM are hammering out the final details of the deal, and may announce the transaction within days, the report said.
In June, ADM said that it is in talks to sell its cocoa business, as the Illinois-based company now focuses on expanding its grains business.
The move came three months after it agreed to pay $3.1 billion to acquire GrainCorp Ltd, Australia's largest independent grains handler. (See: GrainCorp finally submits to ADM's $3.1-bn bid)
ADM's cocoa division, one of the world's largest, is estimated to be worth $2 billion, according to analysts.
It is one of the world's largest processers and suppliers of cocoa and chocolate products and its customer base ranges from industrial manufacturers and global retailers to individual artisans and chefs.
The ADM cocoa product line is marketed around the world under five brands, and has manufacturing facilities in the US, Brazil, Ivory Coast, Ghana and Singapore.
Swiss group Barry Callebaut is the world's largest cocoa grinder after it recently acquired Singapore's Petra Foods' cocoa ingredients business, while Cargill and ADM are the second and third-largest.
The three of them jointly account for around 40 per cent of the global cocoa bean grinding capacity.
Cargill, based in Minnesota, buys cocoa from countries like Ghana, Indonesia, Brazil and Côte d'Ivoire, and has manufacturing plants in Brazil, Indonesia, France, Germany and the UK.
Cargill expanded its cocoa and chocolate business in Europe through the 2011 acquisition of Kakao Verarbeitung Berlin, a German integrated chocolate company, and is currently building a $100 million cocoa processing plant in Indonesia.