In a Nov 25 8-K regulatory filing (click here) ConAgra Foods said: “The Company previously expected the transaction to close late in calendar year 2013 and now expects the transaction to be completed in the first quarter of calendar 2014.
“The Company has revised the timeline due to various reasons, including the ongoing regulatory review process and discussions with the U.S. Department of Justice.”
It would not provide further details about the nature of any potential concerns about the deal, which some wheat-growing states fear will put pressure on prices received by farmers given that Ardent Mills would control an estimated 34% of the US flour milling market.
The proposed deal
Under the proposed deal, ConAgra and Cargill will each have a 44% stake in Ardent Mills, while producer-owned cooperative CHS will own the remaining 12%. All three will have representatives on the board, while CHS will be among the new company’s wheat suppliers.
Ardent Mills - which will operate as an independent joint venture of ConAgra, Cargill and CHS and be based in Denver, Colorado - will be led by Horizon Milling President Dan Dye and joined by ConAgra Mills’ president Bill Stoufer as chief operating officer and chief integration officer.
Horizon Milling is based in Minnetonka, Minnesota. ConAgra Mills is based in Omaha, Nebraska.
Hybrid vigor
Speaking to FoodNavigator-USA after the deal was announced in March, Scott Portnoy, corporate vice president, Cargill, said that while both business had strong R&D capabilities, bringing the two together would “bring some hybrid vigor” to the party.
Horizon Milling would contribute significant expertise and tools in risk management, enabling customers across the combined business to better manage pricing volatility; while ConAgra Mills brought strong consumer insight capabilities to the party, he said.
Asked whether there would be cost synergies from plant rationalization, he said that this was unlikely. However, there would be cost savings on the procurement front, he predicted.