The Canadian mills that make Robin Hood flour and baking mixes for industrial and foodservice users will be part of a new joint venture by the end of May — now that the U.S. Department of Justice has wrapped up its review of the deal.
The department’s antitrust division on Tuesday announced a proposed settlement which will see ConAgra Foods and Horizon Milling shed four specific U.S. flour mills on their way to combining their North American assets in a new venture dubbed Ardent Mills.
The partners, who first proposed their venture in March last year, must now follow through on a deal they announced last month to sell the four mills to Miller Milling, a U.S. unit of Tokyo’s Nisshin Flour Milling. [Related story]
The antitrust division on Tuesday filed both its proposed settlement and a civil lawsuit which would block the joint venture if the four “competitively significant” flour mills aren’t divested as agreed.
The divestitures, the division said, “will preserve flour milling competition in four regions of the country encompassing large cities such as Los Angeles, Dallas, Minneapolis and the San Francisco/Oakland Bay Area.”
Miller Milling, under the settlement, will buy ConAgra’s mills at Oakland, California; Saginaw, Texas; and New Prague, Minnesota; and Horizon Milling’s mill at Los Angeles.
Miller, the division said Tuesday, “has only a minimal presence in the regions of concern” and taking over the four mills will set up “a substantial, independent and economically viable competitor in each relevant market.”
Ardent is to be set up with headquarters at Denver and will operate 40 flour mills, three bakery mix facilities and one specialty bakery in all.
Ardent will also have three joint-venture owners: ConAgra, with a 44 per cent stake, and Cargill and CHS Inc. — the joint-venture owners of Horizon since 2002 — with stakes of 44 and 12 per cent respectively.
The Canadian assets Horizon brings to the Ardent venture include the former Robin Hood flour mills in Montreal and Saskatoon; the former Robin Hood dry baking mix plants at Burlington, Ont. and Saskatoon; and a product development facility at Burlington.
Horizon announced plans in late 2011 to build another flour mill on land it owns at Guelph, Ont., to serve its food processing customers in the southwestern Ontario market.
The Canadian plants had been in J.M. Smucker Co.’s Canadian grain-based foodservice and industrial business when Horizon bought them in 2006. The mills still produce Robin Hood-branded flour, oats, baking mixes and specialty ingredients such as cornmeal and Red River cereal for the industrial and foodservice sectors.
Ardent Mills in its new form “will provide expanded opportunities for wheat growers and co-ops because the new company’s asset base will provide additional sourcing opportunities,” Mark Palmquist, CHS’s chief operating officer for ag business, said in the partners’ release Tuesday.
“In addition, Ardent Mills’ product innovation capabilities and other strengths will enable these wheat growers to further connect to the consumer marketplace.”
“We strongly believe in the merits of this transaction and the benefits it will bring to customers, consumers, wheat suppliers, shareholders and employees,” Paul Maass, ConAgra’s president of private brands and commercial foods, said in the same release.
Ardent is expected to have a “presence” in downtown Denver starting this year, and will operate satellite offices in Omaha and Minneapolis, the companies said. — AGCanada.com Network