ADM Expands its Corn Processing Footprint with Acquisition of Facilities in Bulgaria & Turkey, & Increase of Ownership in Hun...
April 21 2015 - 2:00AM
Business Wire
Archer Daniels Midland Company (NYSE: ADM) today announced an
agreement to purchase several assets of Eaststarch C.V., ADM’s
50-50 joint venture with Tate & Lyle (LSE: TATE). Under the
terms of the agreement, ADM will take full ownership of corn wet
mills in Bulgaria and Turkey, and will own a 50 percent stake in a
wet mill in Hungary. Tate & Lyle will receive a cash
consideration of €240 million, subject to customary closing
adjustments, including for net cash and working capital, and take
full ownership of the Eaststarch facility in Slovakia.
“Our Corn business is creating shareholder value through
geographic expansion and the increasing diversification of our
product portfolio,” said Chris Cuddy, president of ADM’s Corn
Processing business unit. “With the coming end of sugar production
quotas in the EU, the artificial cap on cereal-based sweeteners
will be lifted. There will be tremendous opportunities in the new
European sweetener market, including a particularly strong opening
in Eastern Europe, where there is less sugar production. By
acquiring a greater ownership share in these corn assets, ADM will
be able to better serve our customers as they meet this expanding
European demand for sweeteners. At the same time, we are improving
our capabilities to meet customer needs in the growing market for
starch in Europe.”
The Bulgaria, Turkey and Hungary facilities have a combined
daily grind capacity of approximately 200,000 bushels. They produce
primarily sweeteners and starches; the Hungary facility also
produces ethanol for fuel, beverage and industrial uses. This will
increase ADM’s global grind capacity for corn 7.5 percent, to
approximately 3 million bushels per day.
“The value of this transaction reflects the anticipated decline
in EU sugar prices,” Cuddy added. “We expect this deal to meet our
returns objectives.”
As part of the transaction, ADM will supply Tate & Lyle with
crystalline fructose from the Turkey facility. In addition, Tate
& Lyle will appoint ADM as the exclusive agent for the sale of
liquid sweeteners and industrial starches produced by its EU
plants.
Eaststarch, a 50-50 joint venture between ADM and Tate &
Lyle, was formed in 1992. It owns three corn wet mills—one in
Slovakia, one in Bulgaria and one in Turkey—and 50 percent of a
mill in Hungary. The venture deals primarily in corn sweeteners and
starches.
The transaction is subject to regulatory approval in some
jurisdictions. ADM is targeting closing the deal this summer.
Forward-Looking Statements
Some of the above statements constitute forward-looking
statements. ADM’s filings with the SEC provide detailed information
on such statements and risks, and should be consulted along with
this release. To the extent permitted under applicable law, ADM
assumes no obligation to update any forward-looking statements.
About ADM
For more than a century, the people of Archer Daniels Midland
Company (NYSE: ADM) have transformed crops into products that serve
the vital needs of a growing world. Today, we’re one of the world’s
largest agricultural processors and food ingredient providers, with
more than 33,000 employees serving customers in more than 140
countries. With a global value chain that includes more than 460
crop procurement locations, 300 ingredient manufacturing
facilities, 40 innovation centers and the world’s premier crop
transportation network, we connect the harvest to the home, making
products for food, animal feed, chemical and energy uses. Learn
more at www.adm.com.
Archer Daniels Midland CompanyMedia
RelationsJackie Andersonmedia@adm.com312-634-8484
Archer Daniels Midland (NYSE:ADM)
Historical Stock Chart
From Mar 2024 to Apr 2024
Archer Daniels Midland (NYSE:ADM)
Historical Stock Chart
From Apr 2023 to Apr 2024