Divestitures, another delay in creation of Ardent

by Josh Sosland
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OMAHA, NEB. — Announcing a second delay in the formation of Ardent Mills, ConAgra Foods, Inc. said the partners in the milling joint venture were prepared to divest 4 of the 44 mills that were to be included in Ardent.

ConAgra offered an updated timetable and discussed the divestitures in a Form 8-K filing Feb. 10 with the Securities and Exchange Commission. ConAgra said it now expects the transaction to be completed in the second quarter of calendar 2014.

Ardent, which would combine the flour milling operations of ConAgra Mills and Horizon Milling (itself a joint venture of Cargill and CHS), was first announced nearly a year ago, in March 2013. The merger would be the largest in the history of the U.S. flour milling industry.

ConAgra cited an ongoing regulatory review process as one factor among “various reasons” for the revised timeline.

“The company, Cargill and CHS are prepared to divest four flour milling facilities: Horizon Milling’s Los Angeles, Calif., mill; and ConAgra Mills’ Oakland, Calif.; Saginaw, Texas; and New Prague, Minn., mills,” the filing said. “The company expects these facilities would be divested prior to, or simultaneous with, the closing of the Ardent Mills transaction. Completion of the transaction remains subject to reaching agreement with the U.S. Department of Justice, financing and other certain customary closing conditions. ConAgra Mills and Horizon Milling will continue to operate their respective mills until the potential sales are completed and Ardent Mills is formed.”

According to the 2014 Grain and Milling Annual published by Sosland Publishing Co., the four mills to be divested have a combined daily flour milling capacity of 62,500 cwts and would reduce the aggregate Ardent daily capacity to 513,600 cwts from 576,100 cwts — an 11% reduction. Ardent’s remaining mills would include at least one within 75 miles of each of the divested facilities.

ConAgra recently updated the Oakland mill in a $21 million modernization project.

 The combined capacity of the four mills, at 62,500 cwts, would, as a standalone business, represent the seventh largest flour milling company in the United States (the sixth after Ardent was created, combining Horizon and ConAgra).

The Ardent transaction closing initially had been forecast by the companies to be completed before the end of calendar 2013. In a November filing, ConAgra revised its timetable for closing the deal into the first quarter of 2014, citing the regulatory review process.
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