ConAgra Mills, Cargill and CHS have entered into an agreement to combine their North American flour milling businesses to form a new flour milling company known as Ardent Mills, which will cater to customers in the baking and food industries.
The new joint venture will bring together the leading flour milling companies in the US - ConAgra Mills, a part of ConAgra Foods' Commercial Foods division, and Horizon Milling, a Cargill-CHS joint venture formed in 2002.
Ardent Mills will utilise the strengths, capabilities and expertise of ConAgra Foods, Cargill and CHS to offer flour and grain products, services and solutions, which will be supported by a network of wheat sourcing capabilities, flour milling and bakery mix facilities across North America.
In addition, it will offer product development resources, technical and application support, supply chain management and commodity price risk management services, while incorporating market knowledge, transportation logistics, consumer insights, food ingredients and culinary expertise.
The new company will be supported by 44 flour mills, three bakery mix facilities and a speciality bakery, all located in the US, Canada and Puerto Rico.
Under the deal, ConAgra Foods and Cargill will each own a 44% interest in the new company, while CHS will own the remaining stake.
In exchange for the agreed ownership interests, ConAgra Foods, Cargill and CHS will contribute their respective milling operations to Ardent Mills on a cash-free, debt-free basis.
ConAgra Mills posted revenues of approximately $1.8bn in the fiscal year ended 27 May 2012, while Horizon Milling reported sales of approximately $2.5bn in its fiscal year ended 31 May 2012.
The formation of Ardent Mills, which is subject to customary closing conditions and regulatory approvals, is expected to be completed by the end of this year, and it will operate as an independent joint venture of its three parent companies.
Horizon Milling president Dan Dye will lead the new company as chief executive officer, while ConAgra Mills president Bill Stoufer will serve as chief operating officer and chief integration officer.