Merger of Flour Milling Giants Gets Provisional Approval
Three corporate players in the flour milling business, which is essential to the U.S. food manufacturing industry, have gotten provisional approval from federal anti-trust regulators to form the nation’s largest producer of wheat flour.
Cargill Inc., CHS Inc. and ConAgra Foods Inc. intend to form a joint venture called Ardent Mills that will control 40 mills and yield about $4 billion in annual sales. The new company will be responsible for about one-third of the U.S. flour business. Cargill and CHS are currently in a joint venture called Horizon Milling, which would be folded into the new operation.
Officials inside the U.S. Department of Justice initially balked at the merger, saying it would have reduced competition for flour production and possibly raised wheat prices.
A federal lawsuit prompted the heads of ConAgra, Cargill and CHS to propose a settlement in which the three companies would sell off four mills to Miller Milling Co., a Minnesota-based subsidiary of Nisshin Seifun Group Inc., a Japanese food and medicine corporation. The Justice Department approved the offer, clearing the way for the merger to go through. It will likely close by May 29.
“Without the Antitrust Division’s required divestitures, the creation of Ardent Mills would have resulted in less competition in the sale of wheat flour, resulting in customers, such as industrial bakers and food service companies, paying higher prices for wheat flour and ultimately consumers paying more for products they enjoy in their everyday lives, such as bread, cookies and crackers,” Renata B. Hesse, deputy assistant attorney general for the antitrust division, said in a prepared statement. “The divestitures will ensure that competition for hard and soft wheat flour sales is preserved in regions surrounding Los Angeles, Dallas, Minneapolis and the Bay Area.”
The four flour mills being divested are ConAgra facilities in Oakland, California; Saginaw, Texas; and New Prague, Minnesota; and a Cargill mill in Los Angeles.
Some anti-trust watchdogs were not satisfied with the sell-off. Diana Moss, vice president of the American Antitrust Institute, told The Wall Street Journal the sales of the mills will help reduce Ardent’s competitive advantage, but still result in “a new, much larger entity that will undoubtedly affect the landscape of milling markets.”
To Learn More:
Flour-Milling Joint Venture Ardent Gets Provisional Approval (by Jacob Bunge, Wall Street Journal)
Proposed Ardent Mills Settlement Announced by D.O.J. (by Josh Sosland, Baking Business)
Flour Mill Divestiture for ConAgra Joint Venture (Courthouse News Service)
- Top Stories
- Unusual News
- Where is the Money Going?
- U.S. and the World
- Appointments and Resignations
- Latest News
- Billionaires on the March to Control Dissemination of News
- National Institutes of Health Approves Experiments to Reactivate Brains of Dead People
- Lives of U.S. Military Rape Victims Ruined by “Personality Disorder” Labels Given Them in Discharge Papers
- Civil Rights Groups Question Motive of Louisiana’s Enactment of Hate Crimes Law to Protect Police
- Climate Change Denier Trump Cites Global Warming as Reason to Build Wall to Protect His Luxury Golf Course