World Grain - April 2014 - 20

newsreview
Milner Milling acquiring Cereal Food Processors
CHATTANOOGA, TENNESSEE, U.S. - Milner Milling Co. announced on March 10 an agreement under which Milner and its
partner milling company, Pendleton Flour Mills, will acquire Cereal Food Processors, Inc., Mission Woods, Kansas, U.S.
Terms of the transaction, which will bring together some of the
nation's most prominent independent flour milling companies,
were not disclosed. Milner said a new name for the combined business would be announced at a later time.
The acquisition is subject to regulatory approval and expected
to close this spring. It would nearly triple the combined size of
Milner/PFM. Cereal Food Processors is the fourth largest flour
milling company in the United States, with daily milling capacity of 103,400 cwts. The capacities of Milner (34,800 cwts) and
Pendleton (24,800) together total 59,600 cwts. Once the transaction is completed, the combined company would have daily milling
capacity of 164,000 cwts, with flour mills in the states of Alabama,
California, Georgia (2), Hawaii, Idaho, Kansas (3), Montana (2),
Ohio, Oregon (2) and Utah (2).
Based in Chattanooga, Milner Milling is a privately owned
milling business with flour mill locations in Barnesville, Georgia;
Rome, Georgia; and Birmingham, Alabama. Milner also is a 50%
managing owner of Pendleton Flour Mills LLC, which owns flour

mills in Portland, Oregon; Honolulu, Hawaii; and Blackfoot, Idaho.
Kerr-Pacific Corp., Portland, is the other partner in Pendleton.
Peter Frederick is president and Charles B. Stout is chief executive officer of both companies.
Cereal Foods Processors was established in 1972 by Fred L.
Merrill with the acquisition of a single flour mill in Cleveland from
International Multifoods Corp. Over the next 42 years, CFP grew
to become the largest independent flour milling company in the
United States. Merrill retired in 2012. The company operates 10
flour mills in the United States.
The Milner/Pendleton/Cereal transaction has echoes of another,
much larger one, announced almost exactly one year ago that also
looks to bring three milling companies together. In March 2013
ConAgra Foods, Inc. and Horizon Milling LLC announced plans to
combine the milling assets of ConAgra and Horizon (itself a joint
venture of Cargill and CHS, Inc.) to create the nation's largest flour
milling company. Later renamed Ardent Mills, the proposed company's creation has since run into regulatory hurdles that the companies
say will necessitate the divestiture of at least 4 of their 44 flour mills.
Even after the divestiture, Ardent, with 513,6000 cwts of capacity,
will be more than three times larger than Milner/Pendleton/Cereal
Food, which will be the nation's third largest flour milling company.

Temasek subsidiary makes bid for Olam
SINGAPORE - Breedens Investments Pte. Ltd., an indirectly
wholly owned subsidiary of Singapore-based investment company
Temasek Holdings, announced on March 14 that it has made a $2.1
billion cash offer to acquire Olam International Limited.
Breedens leads a consortium that includes Aranda Investments
Pte. Ltd., Olam founding family shareholders, and 10 members of
the Olam executive committee. Breedens and Aranda hold the largest
stake of 24.6% in Olam, followed by Olam founding family shareholders with the second largest stake of 20.2%. Together, the consortium owns a combined majority stake of 52.5% in Olam.
The offer price of S$2.23 per share is a premium of 11.8% over the
last traded price on the last full trading day immediately preceding
the offer announcement.
Through this offer, Breedens said it wishes to provide Olam with
a stronger long-term shareholder base to support Olam's strategy and

growth plans over the medium to long term.
"Members of our consortium are all long-term shareholders of
Olam," said David Heng, director of Breedens. "We have invested in
Olam over the years and share a common investment philosophy to
invest and build for the long term.
"We believe a successful offer will provide Olam with a stronger and
more stable shareholder base to support Olam's strategy and business
model for the long term. We prefer to keep Olam as a listed company,
which will continue to be guided by its board and management team."
The Olam founding family shareholders and key management
have agreed not to dispose of their stakes without Breedens' consent during the offer period and six months thereafter. They have
also given Breedens a pre-emption right to purchase their shares,
subject to certain limited exceptions as specified in the consortium agreement.

Despite strong sales, Louis Dreyfus income declines
ROTTERDAM, NETHERLANDS - Louis Dreyfus Commodities B.V. reported on March 26 that its net income dropped 34% to
$640 million from $970 million in 2012. This despite the fact that
the company's net sales of $63.6 billion represent an increase of 11%
from $57.1 billion in 2012. Sales were supported by a 10% growth in
shipped volumes. Larger crops hurt agricultural prices and the lower
price volatility hurt trading operations.
"These are very good results, even compared to the record year
2012," said Serge Schoen, executive chairman, Louis Dreyfus Commodities Holdings Group. "In 2013, we transported and processed
more than 77 million tonnes of commodities. We also continued our
investment program to diversify and expand our reach, investing
$689 million across all our business lines."
"Our diversification in activities, global presence and integrated
model have enabled us to continue delivering for our customers and
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maintain an edge versus our peers," said Ciro Echesortu, chief executive officer of Louis Dreyfus Commodities.
Overall, Louis Dreyfus Commodities once again achieved a strong
performance thanks to diversification, with segment operating results
of $1.7 billion. Sales to emerging markets represented 67% of total
sales, the same proportion as the previous year.
The Group pursued its ongoing program of vertical integration, both
upstream and downstream, while making selective use of funds and
divesting non-core assets, in order to achieve targeted growth. Upstream, major steps included the inauguration of an export elevator
facility at the Port of Greater Baton Rouge, Louisiana, U.S., and entering the Australian cotton market through a joint venture. The Group
also strengthened its presence in the fertilizers market in Australia and
invested in animal feed mills in China. A parallel step downstream was
to enter a rice distribution joint venture in South Africa.
April 2014 / World Grain / www.World-Grain.com

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World Grain - April 2014

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