Exclusive: Cargill explores purchase of ADM's cocoa unit - source

Tue Jul 2, 2013 1:13pm EDT
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By Josephine Mason

NEW YORK (Reuters) - Cargill Inc CARG.UL, one of the world's leading cocoa traders, has explored the possibility of buying Archer Daniels Midland Co's (ADM.N: Quote) cocoa business, a source familiar with the situation said, a purchase that would create a global giant in the sector.

Privately held Cargill performed due diligence on the ADM business last month, the source said.

It is unclear whether Cargill, one of the world's biggest argibusinesses, has placed a bid for ADM's unit, which is estimated to be worth $2 billion, or that it intends to do so.

Combining two of the world's top cocoa merchants and bean grinders would create a company big enough to compete with Zurich-based Barry Callebaut (BARN.S: Quote), the world's biggest maker of industrial chocolate products.

ADM declined to comment beyond its bare-bones statement in June that it was in discussions about a potential sale of the business.

A spokesman for Cargill would not comment on the company's ADM interest but said in an email the company continues to assess initiatives.

Barry Callebaut on Monday sealed its $860 million acquisition of the cocoa ingredients division of Petra Foods PEFO.SI.

ADM, Cargill and Barry Callebaut account for as much as 40 percent of world cocoa bean grinding capacity and also dominate exports from the top producing nations, according to a United Nations report on the global cocoa industry from 2008.   Continued...

A logo is pictured on the building of Cargill International SA in Geneva August 4, 2009. REUTERS/Denis Balibouse