Archer Daniels Midland To Buy Several Assets Of Eaststarch C.V. - Quick Facts

(RTTNews) - Archer Daniels Midland Company (ADM) announced an agreement to purchase several assets of Eaststarch C.V., ADM's 50-50 joint venture with Tate & Lyle (TATE.L).

As per the terms of the agreement, ADM will take full ownership of corn wet mills in Bulgaria and Turkey, and will own a 50 percent stake in a wet mill in Hungary.

Tate & Lyle will receive a cash consideration of 240 million euros, subject to customary closing adjustments, including for net cash and working capital, and take full ownership of the Eaststarch facility in Slovakia.

The Bulgaria, Turkey and Hungary facilities have a combined daily grind capacity of approximately 200,000 bushels. They produce primarily sweeteners and starches; the Hungary facility also produces ethanol for fuel, beverage and industrial uses. This will increase ADM's global grind capacity for corn 7.5 percent, to approximately 3 million bushels per day.

As part of the transaction, ADM will supply Tate & Lyle with crystalline fructose from the Turkey facility. In addition, Tate & Lyle will appoint ADM as the exclusive agent for the sale of liquid sweeteners and industrial starches produced by its EU plants.

Eaststarch, a 50-50 joint venture between ADM and Tate & Lyle, was formed in 1992. It owns three corn wet mills—one in Slovakia, one in Bulgaria and one in Turkey—and 50 percent of a mill in Hungary. The venture deals primarily in corn sweeteners and starches.

The transaction is subject to regulatory approval in some jurisdictions. ADM is targeting closing the deal this summer.