BRUSSELS — The European Commission on July 17 said it has approved Cargill’s proposed acquisition of the industrial chocolate business of Archer Daniels Midland Co. under the condition that Cargill sell ADM’s chocolate plant in Mannheim, Germany.
Since the U.S. Department of Justice previously granted its approval, the European Commission’s action completes the regulatory approval process for the global deal, according to Cargill.
Cargill, upon the closing of the transaction, will take over ownership of three chocolate compound and liquor production sites in North America (Milwaukee; Hazleton, Pa.; and Georgetown, Ont.) and three chocolate and compound production sites in Europe (Liverpool, United Kingdom; Manage, Belgium; and Mannheim). Cargill also will add the Ambrosia, Merckens and Schokinag brands to its portfolio.
Cargill then will need to sell the Mannheim facility, which is the largest of ADM’s industrial chocolate plants in Europe and is ADM’s only industrial chocolate plant in Germany, according to the European Commission. The Mannheim facility will be kept as a separate entity until Cargill reaches an agreement with a prospective buyer.
“The acquisition underlines Cargill's commitment to meeting our customers' needs and constitutes a milestone for our chocolate growth strategy, strengthening our position as a leading player in the cocoa and chocolate industry,” said Bryan Wurscher, president of Cargill Cocoa and Chocolate North America. “The new organization will deepen our service to chocolate customers and expand our footprint and production capability significantly. Customers will benefit from a combined business with a broad range of high quality cocoa and chocolate products for confectionery, bakery, dairy, and other applications.”
Minneapolis-based Cargill on Sept. 2, 2014, originally announced its plans to purchase the global chocolate business of Chicago-based ADM for $440 million. The European Commission on Feb. 23 of this year announced it was undertaking an in-depth investigation of the transaction. Since Cargill and ADM were important suppliers of industrial chocolate to Germany, the proposed transaction would eliminate an important competitor, according to the European Commission, the executive body of the European Union. On July 17 the European Commission gave its approval under the condition Cargill sell the Mannheim facility.
“Chocolate is a sweet yet serious business, and we want to ensure that consumers will not have to pay more for their favorite chocolate sweets, biscuits and ice cream,” said commissioner Margrethe Vestager, in charge of competition policy. “With Cargill's divestment of ADM's industrial chocolate plant in Mannheim the commission is confident effective competition will continue.”
