4-mill sale must precede flour merger

  • Article by: MIKE HUGHLETT , Star Tribune
  • Updated: May 20, 2014 - 9:09 PM

Cargill, CHS and ConAgra must sell four mills before combining to form nation’s leading flour miller by far.

A giant merger that includes the flour operations of two Minnesota companies, Cargill and CHS, will go forward after the U.S. Justice Department mandated the sale of four mills because of antitrust concerns.

The four mills, including one in New Prague, will be sold for $215 million to Bloomington-based Miller Milling, a subsidiary of Japanese flour giant Nisshin Seifun.

Minnetonka-based Cargill Inc., Inver Grove Heights-based CHS and Omaha-based ConAgra Foods announced the merger in March 2013, combining flour operations into a powerhouse with 44 mills and over $4 billion in sales. Cargill and CHS already pool flour operations in a joint venture called Horizon Milling.

The new joint venture will be the nation’s leading flour miller by far, combining respectively the current No. 1 and No. 3 players, Horizon and ConAgra. The merged company will be called Ardent Mills and be based in Denver. It will have flour mills in Rush City, Mankato and Lake City — all Horizon locations — and Hastings, a ConAgra site.

The Ardent deal’s closing has been delayed by a federal antitrust review. The Justice Department on Tuesday concurrently announced a civil suit and a settlement of that suit, pivoting on the sale of four of the 44 mills.

ConAgra will divest mills in Oakland, Calif.; Saginaw, Texas, and New Prague, while Horizon will sell its Los Angeles flour mill. Without the divestitures, the Justice Department said in a statement, hard wheat flour prices would be higher in Northern and Southern California, as well as in northern Texas and the Upper Midwest.

Food & Water Watch, a nonprofit group that opposed the merger, said in a statement that the Justice Department required only a “meager divestment.” Ardent will still have a “stranglehold over most wheat farmers from the Rocky Mountains to the Mississippi River,” the group said.

Mike Hughlett • 612-673-7003

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