ADM Buys Assets From Joint Venture to Expand Corn Business

In a move that would expand the group’s global corn business, Archer Daniels Midland (ADM) has agreed to buy some of the assets owned by its joint venture with Tate & Lyle Eastchurch C.V.

Under the existing joint venture structure, ADM and Tate & Lyle each own a 50% stake in three wet corn mills in Bulgaria, Turkey, and Slovakia, and are 50-50 owners in an additional wet mill in Hungary.

Under the new agreement, ADM will buy full ownership in the mills in Bulgaria, Turkey, and Hungary in exchange for transferring full ownership of the mill in Slovakia to Tate & Lyle, in addition to a cash payment of €240 (US$259.87 million). Additionally, ADM has agreed to supply crystalline fructose from the mill in Turkey to Tate & Lyle, and will be the exclusive agent to sell the liquid sweeteners and liquid industrial starches produced by Tate & Lyle across Europe.

With the elimination of EU sugar quotas and the lifting of the cap on cereal-based sweeteners driving up EU demand, ADM management foresees new growth opportunities in the market. Combined, the Bulgaria, Hungary, and Turkey facilities have a daily corn grinding capacity of 200,000 bushels per day – primarily for the production of starches and sweeteners, however the Hungary plant also produces ethanol for use in making fuel, beverages, and for industrial applications. The acquisition of these assets is expected to increase ADM’s global daily corn grinding capacity by 7.5% to 3 million bushels per day, enabling ADM to better meet the rising demand for sweeteners and starches in the EU.