Singapore-based Olam International Limited will acquire the global cocoa business of Archer Daniels Midland Company (ADM) at an enterprise value on a cash and debt free basis of US$1.3 billion.
This comprises fixed assets of US$550.0 million and working capital of US$750.0 million, subject to closing adjustments.
ADM’s worldwide cocoa business comprises cocoa processing assets made up of eight factories with total capacity of 600,000 metric tons, 10 warehouses, two usines, four innovation centers, deZaan brand and its 2,150 plus customer franchise, and a marketing network across 16 countries.
The acquired business does not include assets under ADM’s global chocolate business. Over 1,500 ADM Cocoa employees including 30 research and development professionals will join the combined cocoa entity as part of the transaction.
“With cocoa being a prioritized platform for investment, this proposed acquisition represents a transformational opportunity for Olam Cocoa to become an integrated global leader in a market with attractive growth prospects,” says Olam’s co-founder, group MD and CEO, Sunny Verghese.
With farm-gate origination, sustainability programs, trading and export presence in all major cocoa origins, except Brazil, in recent years, Olam Cocoa has integrated its supply chain by investing in origin processing in Côte d’Ivoire and Nigeria, and in value-added processing facilities in Spain and the UK.
The proposed acquisition is expected to enhance value for all of Olam’s stakeholders as it transforms Olam Cocoa into:
• A market global integrated player with an origination footprint in all key producing origins, including Brazil; and
• One of the world’s top three cocoa processors. The combined capacity will be approximately 700,000 MT as eight midstream processing facilities from ADM Cocoa in the Netherlands, Germany, Brazil, Singapore, Ghana, Côte d’Ivoire and Canada are added to Olam Cocoa’s existing midstream processing portfolio.