Milling & Baking News - December 25, 2012 - 9

Business

ADM sells its stake in Gruma, ends 16-year partnership
DECATUR, ILL. — Sixteen years after initially acquiring an interest in Gruma S.A.B. de C.V., Archer Daniels Midland Co. announced last week it has sold back its stake in the Mexico Citybased company. On Dec. 17, ADM said it sold its 23% interest in Gruma and its equity investments in related joint ventures for $450 million plus an additional contingent payment of up to $60 million. “We are pleased that we were able to reach an agreement with Gruma,” said Ray G. Young, chief financial officer for ADM. “This sale is part of our ongoing portfolio management actions to redeploy capital into key strategic areas that will help drive higher returns in the future.” Under the terms of the sale, ADM received $450 million up front and also will receive up to $60 million in future contingent payments over the next 42 months. The contingent payments are triggered based upon various conditions, including: the increase in Gruma’s stock market price, over the closing price of Gruma’s stock determined for purposes of the transaction, at the end of the 42 month period; the difference between the price of Gruma’s stock fixed for public offers made by Gruma and the closing price; the acquisition, by any strategic investor of Gruma, of 15% or more of Gruma’s capital stock; or the percentage of

‘This sale is part of our ongoing portfolio management actions to redeploy capital into key strategic areas that will help drive higher returns in the future.’
— Ray Young, chief ﬁnancial ofﬁcer, ADM

Gruma’s shares that are considered to be held by the public at any time. Despite exiting its ownership position in Gruma and related investments, ADM said it expects to maintain “a healthy and strong commercial relationship with Gruma globally.” The agreement with ADM came less than a week after Gruma’s board of directors approved the decision to acquire Gruma shares that ADM offered to sell. At that time, Gruma said it had a right of first refusal to acquire

the ADM shares and that the board approved its exercise of this right together with the “obtainment of the corresponding financing.” At the same time, Gruma said the board approved the exercise of the company’s option or right of first refusal to acquire from the trust of the Gonzalez family (connected with the late founder of the company, Roberto Gonzalez Barrera) an indirect interest of 3% in Monaca and Demaseca, subsidiaries of Gruma in Venezuela; 40% of Molinera de Mexico, Mexico’s largest wheat flour milling company; and a 20% stake in Azteca Milling, Gruma’s U.S. corn flour business. Gruma said it was in negotiations with a strategic partner to help accomplish the various acquisitions. The company said it had received a fairness opinion issued by an independent expert. ADM originally acquired a 22% interest in Gruma in 1996 for $258 million. Under terms of the agreement, Gruma also acquired an 80% share in the combined U.S. corn flour operations of the two companies; access to ADM’s corn purchasing, handling and transportation network; a 60% share in a joint venture consisting of ADM’s wheat milling technology and Mexican-based wheat flour mills; and exclusivity in certain corn flour and wheat flour markets. MBN

McCain Foods to buy Australian frozen bakery business
CHICAGO — McCain Foods (Aust) Pty. Ltd. has agreed to acquire 100% of the shares of the Kitchens of Sara Lee frozen bakery business from Hillshire Brands, a move that paves the way for the company to expand its range of products across desserts, meals and snacking occasions. The transaction is valued at approximately $85 million, and includes license rights to certain intellectual property used in the Australian bakery business in the Asia-Pacific region. The acquisition also includes Kitchens of Sara Lee’s manufacturing, marketing, distribution and exporting of frozen desserts. Sara Lee opened the Kitchens of Sara Lee at Lisarow, on the New South Wales Central Coast, in 1971. The business was established to supply Sara Lee products not only to Australia but to the entire Indian Ocean, South East Asia, and Pacific
bakingbusiness.com / world-grain.com

DSM completes Fortitech acquisition
HEERLEN, THE NETHERLANDS – Royal DSM, a diversified ingredient supplier, has completed its acquisition of Fortitech, Inc. for $634 million, Heerlen-based DSM said Dec. 19. Fortitech, a privately-held company based in Schenectady, N.Y., offers ingredient blends for food and beverage, infant nutrition and dietary supplements industries. The transaction was first announced Nov. 8. “The acquisition of Fortitech is the ninth acquisition in the (DSM) Nutrition cluster since we announced our corporate strategy, DSM in motion: driving focused growth, in September 2010,” said Feike Sijbesma, chief executive officer and chairman of the DSM managing board. “These acquisitions will contribute to the current and future growth of our attractive portfolio in health, nutrition and materials, resulting in stronger and more stable growth and profitability for DSM overall.” MBN
Milling & Baking News December 25, 2012 / 9

regions. Today, the company manufactures, sells and distributes a range of Sara Lee branded products in the frozen desserts, super premium ice cream, pastries, frozen savory meals and frozen fruit categories. The company employs about 500 people at the Lisarow facility. “Sara Lee will be a great addition to our family of frozen foods, offering our customers an expanded range of products across desserts, meals and snack occasions,” said Steve Yung, managing director of McCain Australia/New Zealand. “Sara Lee is a recognized and trusted brand that is highly complementary to our business.” Sean Connolly, chief executive officer of Hillshire Brands, said the sale of the Australian bakery business enables Hillshire “to focus on driving growth and innovation in our retail and food service segments in North America.” MBN

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Milling & Baking News - December 25, 2012

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