A food products giant,
ConAgra Foods Inc.
), is collaborating with
) and privately owned Cargill Inc. to set up a new joint venture
called Ardent Mills. The new entity will offer services to
customers in the baking and food industry. Subject to regulatory
approvals, Ardent Mills is expected to start operations later in
the calendar year 2013.
The new company will comprise the operations of ConAgra's
North American flour milling businesses and Horizon Milling, a
Cargill-CHS joint venture formed in 2002. Ardent Mills will
operate independently, while both ConAgra and Cargill will have a
44% ownership, whereas the rest 12% will be owned by CHS. Also,
each company will have its representatives in the board of
Ardent Mills will operate through 44 flour mills, three bakery
mix facilities and a specialty bakery, all located in the U.S.,
Canada and Puerto Rico.
ConAgra Mills contributed around $1.8 billion to the total
revenue for ConAgra in fiscal 2012. Horizon Mills generated
revenue of roughly $2.5 billion in fiscal 2012. Once the
operations begin at Ardent, an initial revenue generation of
$800.0 million to $1.0 billion is estimated. The operations of
Ardent Mills will start through the transfer of assets on a cash
and debt free basis from the parent companies.
The deal is seen as a strategic move to serve the baking and
food industries by creating new flour and grain products,
services and solutions. It is expected that the mill will offer
exceptional services like supply chain management, commodity
price risk management and new product development, using the
expertise and market knowledge of the founder companies.
ConAgra currently holds a Zacks Rank #1 (Strong Buy). Other
stocks worth a look in the food industry are
Chiquita Brands International Inc.
Flowers Foods Inc.
); both holding a Zacks Rank #1 (Strong Buy).
CONAGRA FOODS (CAG): Free Stock Analysis
CHS INC (CHSCP): Get Free Report
CHIQUITA BR INT (CQB): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
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