ConAgra Foods Inc. (CAG), Cargill Inc. and CHS Inc. (CHSCP)
agreed to form an independent joint venture, combining their North
American flour-milling businesses into a new company called Ardent
Mills.
The new company will combine ConAgra Mills and Horizon Milling,
a Cargill-CHS joint venture formed in 2002. It will serve customers
in the baking and food industries, offering services including
product development resources, technical and application support,
supply-chain management and commodity price risk management.
ConAgra Foods, Cargill and CHS will contribute their respective
milling operations to the new company on a cash-free, debt-free
basis in exchange for ownership interests. Sales for ConAgra Mills
were about $1.8 billion in its last fiscal year, while Horizon
Milling's were about $2.5 billion.
The owners intend to receive cash distributions from Ardent
Mills at closing, with initial estimates of the total proceeds to
be $800 million to $1 billion.
Dan Dye, who currently serves as president of Horizon Milling,
will lead Ardent Mills as chief executive. He will be joined by
Bill Stoufer, current president of ConAgra Mills, as Ardent Mills's
chief operating officer and chief integration officer.
The company's operations and services will be supported by 44
flour mills, three bakery mix facilities and a specialty bakery,
all located in the U.S., Canada and Puerto Rico. The location of
its headquarters will be determined later, the parent companies
said.
ConAgra Foods and Cargill will each own a 44% stake in Ardent
Mills, with CHS owning a 12% interest. All three companies will
have representatives on Ardent Mills' board.
The formation of Ardent Mills is expected to be completed in
late 2013.
The owners intend for Ardent Mills to be self-financed through
cash flow from operations and its own bank debt and credit
facility.
ConAgra's shares were up 13 cents at $34.83.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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