A major new player in the flour milling industry may not now emerge until the second quarter of this year, as regulators continue to scrutinize the proposed merger of ConAgra Mills and Horizon Milling (a joint venture between Cargill and CHS) to create Ardent Mills.
The deal - first announced in March 2013 - was originally expected to close late last year. Then in December, ConAgra said it would probably close in early 2014. Today it has pushed the date forward again to Q2 of calendar year 2014.
In an 8-K regulatory filing (click here ) ConAgra Foods said there were “various reasons" for the delay, "including the ongoing regulatory review process”.
The companies are prepared to divest four flour milling facilities before or at the time of the merger: Horizon's facility in LA; and ConAgra's facilities in Oakland, CA; Saginaw, TX; and New Prague, MN.
Completion of the transaction remains subject to reaching agreement with the U.S. Department of Justice, financing and other certain customary closing conditions.
The proposed deal
Under the proposed deal, ConAgra and Cargill will each have a 44% stake in Ardent Mills, while producer-owned cooperative CHS will own the remaining 12%. All three will have representatives on the board, while CHS will be among the new company’s wheat suppliers.
Ardent Mills - which will operate as an independent joint venture of ConAgra, Cargill and CHS and be based in Denver, Colorado - will be led by Horizon Milling President Dan Dye and joined by ConAgra Mills’ president Bill Stoufer as chief operating officer and chief integration officer.
Horizon Milling is based in Minnetonka, Minnesota. ConAgra is based in Omaha, Nebraska.
ConAgra revises forecasts
The Ardent Mills delay was announced as ConAgra Foods revised its financial outlook for fiscal 2014.
Profits will be slightly lower than previously anticipated, said ConAgra Foods CEO Gary Rodkin, blaming "a longer-than-expected timeframe to restore the private brands segment to planned levels of operating profit", "weaker-than-expected volumes in the Consumer Foods segment", and "margin pressures in the Commercial Foods segment driven by customer mix challenges and poorer-than-expected potato crop quality".
Click here to read more about Ardent Mills.