Snack and Bakery

Cargill, CHS, ConAgra must sell 4 mills before merger

May 21, 2014

A merger that includes the flour operations of two Minnesota companies, Cargill Inc., Minnetonka, and CHS Inc., Inver Grove Heights, will go forward after the U.S. Department of Justice mandates the sale of four mills because of antitrust concerns.The four mills, including one in New Prague, will be sold for $215 million to Bloomington-based Miller Milling Co., a subsidiary of Japanese flour giant Nisshin Seifun.

Cargill, CHS and Omaha, Neb.-based ConAgra Foods announced the merger in March 2013, combining flour operations into a powerhouse with 44 mills and more than $4 billion in sales. Cargill and CHS already pool flour operations in a joint venture called Horizon Milling.

The new joint venture reportedly will be the nation’s leading flour miller, combining, respectively, the current number one and number three players, Horizon and ConAgra. The merged company will be called Ardent Mills and based in Denver. It will have flour mills in Rush City, Mankato and Lake City, all Horizon locations, and Hastings, a ConAgra site.

The Ardent deal’s closing has been delayed by a federal antitrust review. On May 20, the Justice Department concurrently announced a civil suit and a settlement of that suit, pivoting on the sale of four of the 44 mills.

ConAgra will divest mills in Oakland, Calif.; Saginaw, Texas; and New Prague, while Horizon will sell its Los Angeles flour mill. Without the divestitures, the Justice Department said in a statement, hard wheat flour prices would be higher in northern and Southern California, northern Texas and the upper Midwest.

Source: StarTribune