ADM set to take full control of Toepfer

(Dave Bedard photo)

U.S. agrifood giant Archer Daniels Midland plans to buy the stake it doesn’t yet own in international grain trading house Toepfer International, and to forge ahead with the sale of its chocolate business, in its latest round of “portfolio management.”

ADM, which has owned 80 per cent of Toepfer since 2002, said Tuesday it proposes to pay 83 million euros (C$125.8 million) for the 20 per cent share held by French agricultural co-operative Union InVivo since 2010.

The proposed deal, to be done through InVivo’s exercise of a put agreement, is subject to the usual regulatory approvals, ADM said. InVivo is to remain a “strategic business partner” for ADM in Europe, the U.S. company said.

The deal, when completed, would grant ADM full control of Hamburg-based Toepfer’s worldwide holdings — including its Canadian grain trading and crop processing business.

“Toepfer has an important presence in critical origination areas as well as growing destination markets,” ADM CEO Patricia Woertz said in a release. Full ownership, she added, “will allow us to strengthen this business and fully integrate it into ADM’s global origination network.”

Toepfer, which has had a Canadian branch since 1974 including a grain trading office in Winnipeg, entered the Prarie processing business in 2011 by buying Western Grain Trade Ltd. and Western Grain Cleaning and Processing Ltd. [Related story]

The combined business, which now operates as Toepfer International’s Western Grain and Processing division, processes and exports peas, lentils, mustards, flaxseed and various other crops through two plants at North Battleford, Sask., with a sales and logistics office in Saskatoon.

Ontario chocolate

ADM said Tuesday it has a deal with advisers to continue to pursue the sale of its chocolate business — including a Toronto-area manufacturing plant at Georgetown, Ont. — while retaining the “majority” of its cocoa press operations.

“Over the last year or so, we’ve taken significant actions to improve our cocoa business, most notably by significantly reducing invested capital. At the same time, we have also seen industry conditions improve as crop supplies have returned to normal,” Woertz said Tuesday.

“Given improved underlying conditions and the success of our efforts to reduce capital intensity, we see a promising outlook for the cocoa press business and believe it will meet our returns objectives.”

ADM had “extensive negotiations with a potential buyer regarding the sale of our global cocoa and chocolate business,” she said, but “in the end, we could not agree to an outcome that met ADM’s objectives.”

Woertz didn’t name that potential buyer, widely reported last fall as fellow U.S. agrifood giant Cargill — which also operates a cocoa and chocolate processing business with a Canadian arm, Wilbur, based at Burlington, Ont.

Selling its chocolate business while keeping its press operations “will position ADM to realize the greatest overall value from these businesses,” Woertz said.

Along with the Georgetown plant, ADM’s chocolate business includes manufacturing operations in Liverpool, England; Manage, Belgium; and Mannheim, Germany, plus U.S. plants at Hazleton, Pennsylvania and Milwaukee, Wisconsin.

ADM’s “portfolio management” work on Tuesday also included a deal to sell its South American fertilizer distribution business to U.S. fertilizer firm Mosaic Co. for US$350 million. That deal consists mainly of five ADM blending plants — four in Brazil and one in Paraguay.

Mosaic, in a separate release Tuesday, said the all-cash deal is expected to “significantly accelerate” its own growth plans in Brazil and replace a “substantial amount of planned internal investments in that country.”

The deal also includes five-year agreements for Mosaic to supply ADM’s “fertilizer needs” in Brazil and Paraguay. — Network


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