Milling & Baking News - March 19, 2013 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS MARCH 19, 2013 / SIGNATURE INTERVIEW ConAgra, Cargill, CHS in agreement to combine flour milling businesses Durkee sees 1990s origins to Hostess climactic clash Story on Page 28 LATE NEWS C.P.I. grain-based categories a mixed bag WASHINGTON — The Consumer Price Index for baked foods and cereal products rose 0.1% in February, according to the Bureau of Labor Statistics of the U.S. Department of Labor. The index for all food at home, meanwhile, fell 0.1%. Of the 18 items followed by Milling & Baking News, 8 posted month-over-month gains, 9 finished lower and 1 was unchanged. The February index for Cereals and Bakery Products before seasonal adjustment was 269.3% of the 1982-84 average, up 0.6% from a year ago. For all food at home, the February index was 234, up 1.2% from February 2012. The price index for Continued on Page 8 OMAHA — In what would be the largest merger in flour milling history, ConAgra Foods, Inc., Cargill and CHS Inc. on March 5 announced they have reached an agreement to combine their North American flour milling businesses to form a new company to be named Ardent Mills. The combined company will operate 44 flour mills, three bakery mix facilities and a specialty bakery, in the United States, Canada and Puerto Rico. Total daily wheat and durum flour capacity for the combined company will be 576,100 cwts. The new milling company will operate as an independent joint venture of its three parent companies, Omaha-based ConAgra Foods; Minneapolis-based Cargill and St. Paul, Minn.-based CHS. ConAgra Foods and Cargill each will own a 44% stake in Ardent Mills, with CHS owning a 12% interest. Cargill and CHS have been partners in Horizon Milling L.L.C. since the joint venture was formed in 2002, creating the nation’s largest flour milling company. Horizon operates 21 U.S. and Canadian flour mills with combined daily flour milling capacity of 321,000 cwts. The creation of Horizon more than 10 years ago was the last large merger involving a top three milling company until the Ardent announcement. ConAgra, with 23 U.S. flour mills and 255,100 cwts in daily flour milling capacity, ranks as the No. 3 U.S. flour milling Continued on Page 10 Private equity firms unopposed in bid for Hostess snack cake businesses WHITE PLAINS, N.Y. — An auction that would have taken place March 13 was cancelled after Irving, Texas-based Hostess Brands, Inc. said no competing bids were received for its Hostess and Dolly Madison snack cake business. A $410 million offer from HB Holdings L.L.C., an affiliate of private equity groups Apollo Global Management L.L.C. and Metropoulos & Co., was the only qualified bid received by the 5 p.m. deadline March 11. The auction process had been approved by U.S. Bankruptcy Court for the Southern District of New York. “We are very pleased to have been named the buyer of the Hostess snack business with our partner Apollo Global Management,” said C. Dean Metropoulos. “Our family is thrilled to have the opportunity to reestablish these iconic brands with new creative marketing ideas and renewed sales efforts and investment. We look forward to having America’s favorite snacks back on the shelf by this summer. We are also ecstatic to bring jobs back to many cities across the country.“ A sale hearing to approve the bid was set for March 19. While details about the resumption of operations are still being worked out, Mark Semer, a spokesperson for Metropoulos, said the company plans to have Continued on Page 9

Table of Contents for the Digital Edition of Milling & Baking News - March 19, 2013

Milling & Baking News - March 19, 2013
ConAgra, Cargill, CHS in agreement to combine flour milling businesses
Private equity firms unopposed in bid for Hostess snack cake businesses
Late News - C.P.I. grain-based categories a mixed bag
Table of Contents
News/Comment - Amid the ruins, union leader makes his case
Editorial - Ardent Mills speaks to milling’s future
Late News
Business - McKee bid for Drake’s brand holds up, subject to court approval
Cargill’s Portnoy cites significant milling marketplace changes
U.S. Attorney objects to liability release in Hostess deals
ACE Bakery opens U.S. bakery
Judge approves injunction against New Jersey bakery
Grain Millers expanding flax business, partnering with Pizzeys
Kashi offices moving to Michigan
International - Health Canada approves listing ingredients as fiber
Industry Activities - Fred Springer honored by A.S.B. at BakingTech 2013
Rick McGrath elected new president of A.T.B.I.
Financial Results - With one-time costs, CSM EBITA dips as divestment process continues
Aryzta sees strength in North American food business
Struggles in Venezuela bog down Gruma fiscal-year earnings
Einstein Noah earnings fall 4% in fiscal 2012
Data - NAMA regional flour data hint at South production share gains
CME Group to reduce grain, oilseed trading hours
Signature Interview - Durkee sees 1990's origins to climactic Hostess clash
Hostess Brands 2012 recap
Buns and Rolls Update - A fresh beginning
Buns getting whole grain boost at McDonald’s
Industry Activities - Sweetener industry sees challenges amid surplus
A.B.A. president speaks in favor of equipment theft bill
BakingTech to switch hotels in 2015
BakingTech 2013 photo highlights
Export forecast lowered, 2013 wheat ending stocks projection raised
Dismal corn exports seen likely to meet U.S.D.A. target
Fermentation and encapsulation offer shelf life benefits
NASS announced sequestration cutbacks
Supplier Innovations
Ingredient Market Trends - I.G.C. forecasts increase in wheat production in 2013-14 but no rebuilding of stocks
Ingredient Week
Marketplace Business Network
Ad Index

Milling & Baking News - March 19, 2013