Archer-Daniels-Midland Co. (ADM:US), the world’s largest corn processor, said it is abandoning plans to sell its cocoa business and will instead focus on divesting its chocolate operations.
ADM hired advisers to help sell the chocolate-making assets as it retains its cocoa presses, the Decatur, Illinois-based company said in a statement today. The company also agreed to sell its South American fertilizer business to The Mosaic Co. for $350 million and plans to purchase the 20 percent of Alfred C. Toepfer International GmbH it doesn’t already own for 83 million euros ($114 million).
Selling the chocolate unit, which has operations in the U.S., Canada, the U.K., Belgium and Germany, is part of ADM’s review of its businesses, which could include acquisitions as well as asset sales. ADM had determined that the cocoa unit, which Stephens Inc. estimates to be worth $1.9 billion, should not be “held for sale,” according to a Nov. 1 filing.
“We had extensive negotiations with a potential buyer regarding the sale of our global cocoa and chocolate business,” ADM Chief Executive Officer Patricia A. Woertz said in today’s statement. “In the end, we could not agree to an outcome that met ADM’s objectives.”
As part of the fertilizer agreement, ADM said it will buy fertilizer from Mosaic after the deal closes and will continue to supply certain fertilizer customers in Brazil and Paraguay. The sale is contingent on regulatory approvals.
ADM has owned 80 percent of Toepfer since 2002. Union InVivo of France has held the remaining 20 percent since 2010.
“We are committed to ongoing portfolio management to realize value from our businesses and to deploy our capital where it can best improve returns,” Woertz said.
ADM slid (ADM:US) 1.2 percent to $44.16 at 2:44 p.m. in New York. The stock has climbed 40 percent in the past year.
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