Milling & Baking News - July 1, 2008 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS JULY 1, 2008 / FEATURE East and west bookends: Flowers to buy bakers in Arizona and Florida It's what's inside that counts Cereal makers shrink boxes, reformulate product to add value. Story on Page 21 LATE NEWS Food and Ingredients profit soars at ConAgra OMAHA - Operating profit in the Food and Ingredients segment at ConAgra Foods, Inc. rose 18% for the year ended May 25. Operating profit of $511.7 million compared with $434.8 million in fiscal 2007. Food and Ingredients sales of $4,128.1 million were 21% higher than $3,421.5 million in the previous year. The unit's sales benefited from milling operations, where higher wheat costs were passed on as higher selling prices. Companywide, ConAgra posted fiscal 2008 net income of $930.6 million, or $1.91 per share on the common stock, up 22% from $764.6 Continued on Page 8 THOMASVILLE, GA. - Flowers Foods Inc., in separate announcements last week, said it will acquire Phoenix-based Holsum Bakery Inc., and Lakeland, Fla.-based ButterKrust Bakery. Combined, the acquisitions will cost Flowers nearly a quarter billion dollars. When completed, the transactions would give Flowers a strengthened presence in Florida, dominant presence in Arizona and a foothold in California and Nevada. According to a June 24 filing with the Securities and Exchange Commission, the Holsum transaction is valued at $150 million, half to be paid in cash and half in newly issued Flowers common stock. Holsum, which has annual sales of $146 million, will operate under its cur- rent name as a subsidiary of Flowers Foods, the company said. Founded in 1881, Holsum employs 580 at two baking plants in Arizona and sells its products through independent distributors who serve retail and food service customers in Arizona, New Mexico, Southern California and southern Nevada. The company's fresh bread and rolls are marketed under the Holsum, Aunt Hattie's and Roman Meal brands. Holsum has long enjoyed high esteem in the baking industry for the leadership it has maintained in Arizona even as many other independent regional baking companies around the country have been acquired by larger companies. "We are fortunate to have this fine Continued on Page 9 Bunge to acquire Corn Products WHITE PLAINS, N.Y. - In a move that would combine two of the oldest and largest agricultural businesses in the United States, Bunge Ltd. on June 23 announced its intent to acquire Westchester, Ill.-based Corn Products International, Inc. for approximately $4.8 billion, which includes the assumption of $414 million of Corn Products debt. As part of the agreement, Corn Products shareholders would receive shares of Bunge common stock worth $56 for each share of Corn Products common stock they own - a 31% premium to Corn Products closing share price of $42.90 on June 20 and a 25% premium to the 20-day average trading price of $44.90. Once the transaction is completed, Corn Products shareholders would own approximately 21% of Bunge. The transaction is expected to close in the fourth quarter of 2008. In addition to their scale and long histories, Corn Products and Bunge stand out among U.S. agribusiness companies for their disproportionately large presence outside the United States. Both companies have significant operations throughout the Western Hemisphere. Bunge has major operations in Europe and the former Soviet Union, as well as India, Southeast Asia and significant Continued on Page 11

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Milling & Baking News - July 1, 2008