UPDATE 3-Cargill buying ADM's chocolate unit in North American expansion
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NEW YORK/CHICAGO, Sept 2 (Reuters) - Commodity merchant Cargill Inc said on Tuesday it will buy the global chocolate business of its rival Archer Daniels Midland Co for $440 million in a move to expand its production capacity in North America.
The deal, which includes three North American chocolate plants and three in Europe, is the biggest yet in Cargill's effort over the past year to increase its chocolate making footprint in a bet on long-term growth in demand.
The deal is a "major milestone in Cargill's chocolate growth strategy," said Bryan Wurscher, president of Cargill Cocoa and Chocolate North America, in a statement.
For ADM, it marks a refocus on its larger cocoa bean processing operations, one of the industry's largest that competes with Barry Callebaut, Cargill and other big cocoa traders Olam International Ltd and Ecom Agroindustrial Corp.
It also comes just over four months after the company ditched plans to sell its cocoa and chocolate business after long-running negotiations collapsed and said it would instead divest the underperforming chocolate operations.
Cargill had been in final-stage talks to buy the combined operation, sources told Reuters last year.
The sale will also allow ADM to "redeploy capital for higher-return investments," ADM Chief Executive Patricia Woertz said.
The agri-merchant has recently made a push into the food ingredient market, scooping up Swiss-German natural ingredient company Wild Flavors for about $3 billion. Continuación...