Olam International has announced that it is set to complete the acquisition of the global cocoa business of Archer Daniels Midland Company (ADM) for $1.3 billion.
In a statement, Olam said the deal would establish Olam Cocoa as one of the world’s top three cocoa processors focused on the supply of cocoa liquor, powder, and butter, with strong manufacturing, R&D and product development skills.
The deal includes 8 factories with total capacity of 600,000 MT, 10 warehouses, 2 usines, 4 innovation centres and the deZaan brand with its 2,150 plus customers franchise, including their marketing network across 16 countries.
According to Olam, the acquisition will create a global platform with origination footprint in every key producing origin with leading proprietary research, trading and risk management skills. In addition it will benefit from economies of scale across the entire value chain with expected synergies of $35.0-40.0 million, it said.
Commenting on the transaction, Olam’s Managing Director and Global Head of Cocoa, Gerard Manley said: “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. Having worked in cocoa for 30 years, I recognise 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”.