MINNEAPOLIS — After months of speculation that it would make the move, Cargill on Sept. 2 said it has agreed to purchase Archer Daniels Midland Co.’s global chocolate business for $440 million. The transaction will include six chocolate plants, several brands, and will add 700 employees.
“This acquisition is a major milestone in Cargill’s chocolate growth strategy and will help us better serve our customers in North America and Europe,” said Bryan Wurscher, president of Cargill Cocoa and Chocolate North America. “It will bring together great people with a deep passion and commitment to producing excellent chocolate. Our customers will benefit from a broader product portfolio, greater access to innovation and product development support.”
Of the six chocolate plants, three are located in North America: Milwaukee, Wis.; Hazleton, Pa.; and Georgetown, Ont.; and three are located in Europe: Liverpool, U.K.; Manage, Belgium; and Mannheim, Germany.
Cargill said the facilities will extend and complement its existing chocolate footprint across North America, Europe, Asia and Brazil, and increase production capacity, particularly in North America.
Cargill, whose product range includes Gerkens cocoa powders, chocolate including Wilbur, Peter’s and Veliche, coatings, fillings, cocoa liquors and cocoa butters, will expand with the acquisition of Decatur, Ill.-based ADM’s Ambrosia, Merckens and Schokinag brands.
Upon completion of the acquisition, Cargill said it will gain approximately 700 new employees.
The combined business will be able to offer “enhanced capabilities and broader product ranges to support the long-term needs of the chocolate market,” Cargill said. The company added that there also will be “real benefit” to customers’ final products through access to Cargill’s application capability and experience in texturizers, oils, fats and sweeteners.
“Cocoa and chocolate products have been key contributors to Cargill’s business since 1979,” said Jos de Loor, president of Cargill Cocoa & Chocolate EMEA and Asia. “We continue to invest strongly in the development of our own facilities and people, and we welcome the opportunity to embrace these new operations and further build on our success together.”
For ADM, the sale of the chocolate business represents the company’s ongoing portfolio management.
“The sale of the chocolate business helps improve ADM’s returns and will allow us to redeploy capital for higher return investments,” said Patricia Woertz, chairman and chief executive officer of ADM.
ADM said it will end cocoa processing operations at Hazelton once the transaction closes, eliminating about 90 positions at the location. Following the transaction, the 1,560 employees of ADM cocoa will continue to supply customers around the world with ADM’s deZaan cocoa ingredients from the company’s cocoa operations in Mississauga, Ont.; Koog aan de Zaan and Wormer, The Netherlands; Mannheim, Germany; Ilhéus, Brazil; Abidjan, Côte d’Ivoire; Kumasi, Ghana; and Singapore.The transaction is subject to regulatory approval in the United States and the European Union. It is expected to close in the first half of 2015.