CHICAGO--The U.S. Justice Department is investigating a plan by
ConAgra Foods Inc. (CAG), Cargill Inc. and CHS Inc. (CHSCP) to
combine their North American flour-milling businesses into a new
joint venture that would form the industry's biggest player.
"The Department of Justice's Antitrust Division is investigating
a proposed joint venture between ConAgra Foods, Cargill and CHS
Inc. that would combine the flour milling operations of ConAgra
Mills and Horizon Milling," Gina Talamona, a spokeswoman for the
U.S. Department of Justice, said Wednesday.
Horizon Milling is a joint venture formed in 2002 between
Cargill and CHS. The proposed new joint venture, announced in March
and called Ardent Mills, would control about one-third of the U.S.
milling market by capacity, selling flour products to customers in
the baking and food industries and offering services such as
product development. Combined annual sales of the new joint venture
would top $4 billion.
Cargill, a major grain processor and trader, and ConAgra, a food
company with brands such as Chef Boyardee and Hunt's, will each
have a 44% stake in Ardent Mills. CHS, a farmer's cooperative, will
control the remaining 12%.
ConAgra Foods believes the formation of Ardent Mills "will
enhance competition and customer and consumer choice," and it
expects to complete the transaction as planned, spokeswoman Becky
Niiya said. Cargill spokeswoman Lori Fligge said Ardent Mills "will
have substantial competition."
CHS spokeswoman Lani Jordan said:"CHS supports the establishment
of Ardent Mills as an opportunity to add value for our producer and
co-op owners in what will continue to be a highly competitive
industry."
Write to Owen Fletcher at owen.fletcher@dowjones.com
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