Archer Daniels Midland nears sale of cocoa operations

|About: Archer Daniels Midland Co. (ADM)|By:, SA News Editor

Archer Daniels Midland (ADM) is reportedly close to selling its cocoa business to Cargill in a deal that could be worth up to $2B.

The divestiture would further strengthen ADM's shift towards the grains industry as it completes its $3B acquisition of GrainCorp. The transaction would also reduce ADM's exposure to the lower profitability that's affecting the cocoa sector.

The deal would create a global price-setting giant to rival Zurich-based Barry Callebaut (BYCBF.PK), the world's biggest producer of industrial chocolate products. Cargill and Barry Callebaut would account for over 50% of world capacity.

Food producers that could be affected include MDLZ, HSY, RMCF, KRFT, NSRGY.PK.

ETF: NIB