FDBusiness.com

The European Commission has granted conditional clearance for Cargill to acquire Archer Daniels Midland’s industrial chocolate business in Europe. Together with the approvals granted earlier by the US Department of Justice, this completes the regulatory approval process for the global deal. Industrial chocolate, sold in both liquid and solid form, is used by customers in the food processing industry to produce consumer foodstuffs such as biscuits, ice-cream and chocolate confectionery.

The $440 million transaction includes ADM’s three North American chocolate plants and three in Europe – at Liverpool (UK), Manage (Belgium) and Mannheim (Germany). These new facilities will extend and complement Cargill’s existing chocolate footprint across North America, Europe, Asia and Brazil, and increase production capacity, particularly in North America.

Cargill’s product portfolio will also add ADM’s Ambrosia®, Merckens® and Schokinag® brands. Upon completion Cargill will gain approximately 650 new employees.

The acquisition is an excellent fit with Cargill’s existing chocolate business and brings together two organizations with strong talent, broad customer bases and extensive research and development capabilities.

“The acquisition underlines Cargill’s commitment to meeting our customers’ needs and constitutes a milestone for our chocolate growth strategy, strengthening our position as a leading player in the cocoa and chocolate industry,” says Bryan Wurscher, president of Cargill Cocoa and Chocolate North America. “The new organisation will deepen our service to chocolate customers and expand our footprint and production capability significantly. Customers will benefit from a combined business with a broad range of high quality cocoa and chocolate products for confectionery, bakery, dairy, and other applications.”

Jos de Loor, president of Cargill’s cocoa and chocolate business EMEA and Asia, comments: “Growing our business goes hand in hand with our commitment to securing the long-term viability of a strong and sustainable cocoa bean supply chain. With the Cargill Cocoa Promise, we are supporting progress towards a transparent cocoa supply chain, enabling farmers to achieve better livelihoods and delivering a sustainable supply of cocoa and chocolate products to meet the growing demands from customers.”

Addressing the European Commission’s competition concerns, Cargill has agreed to divest ADM’s industrial chocolate production facility in Mannheim, Germany. The facility will be kept as a separate entity with its own interim management until an agreement with a prospective buyer has been made.