The proposed transaction includes ADM’s cocoa processing assets, 10 warehouses, four research and development centers, the deZaan brand and a base of customer franchises.

SINGAPORE – Olam International has entered into an agreement to acquire Archer Daniels Midland’s cocoa business for approximately $1.3 billion. The proposed transaction includes ADM’s cocoa processing assets, 10 warehouses, four research and development centers, the deZaan brand and a base of customer franchises. The transaction does not include ADM’s global chocolate business, which is being sold to Cargill.

“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,” said Sunny Verghese, managing director and chief executive officer of Olam International.

If completed, the acquisition will make Olam one of the three largest cocoa processors in the world with a combined production capacity of approximately 700,000 tonnes, according to the company.

“Today we have created a clear path to achieving our goal to fully integrate our supply chain strengths with the global manufacturing and R.&D. capability of ADM Cocoa to provide a seamless offering to our customers,” said Gerard Manley, managing director and global head of cocoa for Olam. “Having worked in cocoa for 30 years, I recognize the value of the deZaan cocoa brand and the high regard in which it is held, thanks to its tradition of excellence and 100 year heritage. The experience and expertise of both companies combined will enable us to attain our expected synergies as we move quickly to integrate our businesses.”

Patricia Woertz, president and c.e.o. of ADM, said the proposed sale is a part of the company’s effort to improve shareholder value.

“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,” she said.