Archer Daniels Midland is Selling its Global Cocoa Business to Olam International
The chocolate industry is about to get complicated, and Archer Daniels Midland Company (ADM) clearly wants no part of it. Back in September, ADM sold off its global chocolate business to Cargill for $440 million; now the agribusiness is getting rid of its global cocoa business, selling its assets off to Olam International Limited for a hefty $1.3 billion.
This deal won’t affect the previously mentioned Cargill deal from earlier this year—these are two completely separate transactions. But as hinted at by the price tag, this is significantly more comprehensive than ADM’s earlier sale to Cargill. That $1.3 billion will put Singapore-based commodities agribusiness and food processor Olam in possession of ADM’s entire cocoa business, including processing facilities in the following areas:
- Mississauga, Canada
- Koog aan de Zaan, Netherlands
- Wormer, Netherlands
- Mannheim, Germany
- Ilhéus, Brazil
- Abidjan, Côte d'Ivoire
- Kumasi, Ghana
Olam will also take on ADM’s cocoa buying stations in Brazil, Cameroon, Côte d'Ivoire, and Indonesia, and will assume control of ADM’s deZaan™ and UNICAO® cocoa brands (its other two cocoa brands, Merckens® and Ambrosia®, are being sold to Cargill). According to ADM, this won’t affect the vast majority of the 1,500 jobs within its cocoa sector—its workers will remain employed by Olam after the sale is finalized.
“We are continuing to actively manage our portfolio to create shareholder value by improving returns and dampening the volatility of our earnings,” said ADM Chairman and CEO Patricia Woertz in a press release issued by the company on Monday. “This transaction will allow us to redeploy capital to investments that offer improved returns potential and less volatility than the cocoa business, or distribute excess capital to shareholders, or a combination of both.”