CHICAGO--(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 Company
Media Relations
Jackie Anderson
media@adm.com
312-634-8484