ADM details moves to reshape portfolio

by Eric Schroeder
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DECATUR, ILL. — Archer Daniels Midland Co. on April 15 said it has acquired the remaining stake of Alfred C. Toepfer International GmbH, agreed to sell its South American fertilizer business, and is pursuing the sale of its chocolate business. The moves are part of ADM’s effort to reshape its portfolio to better realize value from its businesses and to deploy capital where it can be used to improve returns, said Patricia A. Woertz, chairman and chief executive officer.

“Each of these transactions will help ADM continue to improve returns and create shareholder value,” Ms. Woertz said. “These actions complement recent demand-driven strategic investments, such as our $250 million high-value protein facility in Brazil. We are taking action to realize returns today and positioning ourselves for continuing profitable growth around the globe in the future.”

ADM is set to acquire the remaining 20% minority stake of Alfred C. Toepfer International for €83 million ($114 million). Alfred C. Toepfer is one of the world’s largest traders of agricultural commodities.  Since 2002, ADM has owned 80% of Toepfer. Union InVivo, a Paris-based grain and seed company, has held the remaining 20% since 2010.

“Toepfer has an important presence in critical origination areas as well as growing destination markets,” Ms. Woertz said. “For years, ADM has benefitted from our investment in Toepfer. Now, full ownership will allow us to strengthen this business and fully integrate it into ADM’s global origination network.”

InVivo will remain a strategic business partner for ADM in Europe, the company said.

ADM also said it will pursue the sale of its global chocolate business, 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,” Ms. Woertz said. “At the same time, we have also seen industry conditions improve as crop supplies have returned to normal. 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.

“We had extensive negotiations with a potential buyer regarding the sale of our global cocoa and chocolate business. In the end, we could not agree to an outcome that met ADM’s objectives. Instead, ADM is moving ahead with a process to sell our global chocolate business while retaining most of our cocoa press operations. This approach will position ADM to realize the greatest overall value from these businesses.”

ADM has chocolate manufacturing operations in Hazleton, Pa.; Milwaukee; Georgetown, Ont.; Liverpool, U.K.; Manage, Belgium; and Mannheim, Germany.

Finally, ADM said it has signed an agreement to sell its fertilizer business in Brazil and Paraguay to The Mosaic Co. for $350 million. The transaction consists primarily of five ADM-owned blending facilities in Brazil and Paraguay. The purchase price includes $150 million in working capital. As part of the transaction, ADM said it will purchase fertilizer from Mosaic after the closing and will continue to supply certain fertilizer customers in Brazil and Paraguay. The proposed sale will be contingent on customary regulatory approvals.
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