ADM will acquire the remaining 20% percent minority stake of Alfred C. Toepfer International for €83 million ($114.6 million), representing about 1.1 times net book value. The proposed transaction, which is occurring through the exercise of a put agreement by Union InVivo, will be subject to customary regulatory approvals. Since 2002, ADM has owned 80% of Toepfer; InVivo has held the remaining 20% since 2010.
“Toepfer has an important presence in critical origination areas as well as growing destination markets,” said ADM Chairman and Chief Executive Officer Patricia A. Woertz.. “For years, ADM has benefitted from our investment in Toepfer. Now, full ownership will allow us to strengthen this business and fully integrate it into ADM’s global origination network.”
InVivo will remain a strategic business partner for ADM in Europe.
“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. “The actions we are announcing today are results of this continuing process. Each of these transactions will help ADM continue to improve returns and create shareholder value.
“These actions complement recent demand-driven strategic investments, such as our $250 million high-value protein facility in Brazil. We are taking action to realize returns today and positioning ourselves for continuing profitable growth around the globe in the future.”
ADM said it has signed an agreement to sell its fertilizer business in Brazil and Paraguay to The Mosaic Company for $350 million. The transaction consists primarily of five ADM-owned blending facilities in Brazil and Paraguay. The purchase price includes $150 million in working capital. As part of the transaction, ADM will purchase fertilizer from Mosaic after the closing and will continue to supply certain fertilizer customers in Brazil and Paraguay. The proposed sale will be contingent on customary regulatory approvals.
“Our fertilizer team has done a good job building the business since we purchased our first blending facility in 1997,” said Woertz. “But the lengthy value chain inherent in the fertilizer business, along with strong competition from fully integrated companies that have entered the sector, has made it difficult for this business to consistently meet our return objectives. By selling our blending assets—while retaining our distribution business—we will be improving our returns while maintaining our important origination relationships with key growers in Brazil and Paraguay.”
ADM also said it will pursue the sale of its chocolate business, while retaining the majority of its cocoa press operations. The company has engaged advisers to facilitate the sale process.
“We had extensive negotiations with a potential buyer regarding the sale of our global cocoa and chocolate business. In the end, we could not agree to an outcome that met ADM’s objectives,” Woertz said. “Instead, ADM is moving ahead with a process to sell our global chocolate business while retaining most of our cocoa press operations. This approach will position ADM to realize the greatest overall value from these businesses.”