U.S. agribusiness ADM to acquire Wild Flavors for $3 billion

Mon Jul 7, 2014 5:31pm EDT
 
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By Freya Berry and Arno Schuetze

LONDON/FRANKFURT (Reuters) - U.S. agribusiness Archer Daniels Midland has agreed to buy Swiss-German natural ingredient company Wild Flavors for 2.3 billion euros ($3 billion) to enter the flavoring and the health-conscious food sectors.

ADM, one of the world's largest grain traders and a major food processor, said on Monday it would establish a new business unit called Wild Flavors and Specialty Ingredients and expected to complete the deal by the end of the year.

Wild Flavors - ADM's first venture into the flavors market - specializes in natural ingredients. The acquisition, which ADM said was its biggest ever, comes as consumers have been showing increasing appetite for foods made of only natural components.

The deal comes eight months after Australia rejected ADM's attempt to acquire grain handler Graincorp Ltd for A$2.8 billion ($2.55 billion) because of concerns the deal was anti-competitive.

Illinois-based ADM, which has been seeking to expand globally, will need regulatory approval from eight jurisdictions, including the European Union, to acquire Wild, Chief Executive Officer Patricia Woertz said on a conference call.

"We have been known often as a commodity business only," she said. "Now that's probably a misunderstanding."

Private equity group KKR & Co, which bought a 35 percent stake in Wild in 2010, has more than tripled its investment, a person familiar with the investor said.

Sources told Reuters in May that ADM was among private equity and strategic bidders for Wild Flavors, which sources said expected 2014 core earnings (EBITDA) of almost 140 million euros.   Continued...

 
The corporate offices of Archer Daniels Midland (ADM) are seen in this undated handout photo in Decatur, Illinois. REUTERS/Handout/ADM