Cargill, CHS, ConAgra Joint Venture Delayed Yet Again

Cargill, CHS, ConAgra Joint Venture Delayed Yet Again

The flour-milling business merger between Cargill, CHS, and ConAgra Foods is now expected to close in the second quarter of this year rather than late last year. Meanwhile, CHS is returning about $433 million to its owners.

Cargill, Inc., CHS, Inc., and ConAgra Foods, Inc., have yet again had to delay combining their North American flour-milling businesses into a multibillion-dollar joint venture.
 
The companies first announced plans for the Ardent Mills venture—meant to serve customers in the baking and food industries—in March, with an expected transaction completion date of late 2013. Ardent Mills would unite Omaha, Nebraska-based ConAgra Mills and Horizon Milling (a joint venture formed between Wayzata-based Cargill and Inver Grove Heights-based CHS in 2002).
 
However, the project drew the attention of the U.S. Department of Justice and was delayed due to an ongoing antitrust review. ConAgra Foods, Cargill, and CHS then announced that the transaction would be completed in the first quarter of 2014.

 
The companies are now delaying the deal once more, expecting it to close in the second quarter of 2014, citing the ongoing regulatory review process as a reason for the continued delay.
 
ConAgra Foods, Cargill, and CHS are preparing to divest four flour-milling facilities in Los Angeles; Oakland, California; Saginaw, Texas; and New Prague prior to, or simultaneous with, the completion of the Ardent Mills transaction.
 
Cargill and ConAgra will still own a 44 percent stake each in Ardent Mills, while CHS will still own a 12 percent stake.
 
Separately, CHS announced Monday that it is returning an estimated $433 million to roughly 50,000 farmers and ranchers as well as 1,100 member cooperatives that own the company, beginning this month.
 
The energy, grains, and food company said that this year’s cash return was based on its net income, which totaled $992.4 million for the fiscal year that ended August 31, 2013—its second highest on record.
 
“The ability of our owners, who are also our customers, to directly share in the financial success of CHS is a distinct advantage of being part of a cooperative business,” CHS Chairman David Bielenberg said in a statement. “And, this is cash that returns to local communities, enabling farmers, ranchers, and cooperatives to invest in their own futures.”
 
In other recent news, Cargill announced that it’s acquiring Pet Carousel, a Sanger, California-based dog treat producer. The company—which operates within the food, agricultural, financial, and industrial sectors—said that the acquisition complements its existing California distribution and beef processing businesses.
 
Terms of the transaction, which is expected to close around February 28, were not disclosed. Cargill said that Pet Carousel is part of the “pet treat and chew category,” which reportedly generates $1.4 billion in annual sales in the United States.
 
Cargill is Minnesota’s largest private company based on revenue, which totaled $136.7 billion in its most recent fiscal year.