Olam Wins EC Approval For $1.3bn ADM Deal

12 June 2015 --- The European Commission has approved the acquisition of Archer Daniels Midland’s (ADM) cocoa business by Olam International. The deal, worth $1.3bn, will give Singapore-based Olam 16% of global cocoa processing capacity and over 20% of bean output.

Following changes at the top of the cocoa tree, Olam joins Cargill and Barry Callebaut as leading suppliers of cocoa for the ever-buoyant chocolate business. As well as traditional American and European markets, chocolate products are gaining market share in developing regions; improvements in technology mean that consumers in warmer climates are able to enjoy chocolate products that have traditionally spoiled in areas such as Asia, due to melting and off-flavors.

A statement from the EC concluded: "The Commission concluded that the proposed acquisition would raise no competition concerns, given the companies’ moderate combined market positions and the presence of a number of strong players supplying beans and cocoa products in the European Economic Area (EEA)," a statement said.

The companies' activities overlap in the markets for the procurement and supply of cocoa beans, and the supply of cocoa liquor, butter and powder.

As part of the deal, Olam will become a leading supplier of cocoa liquor, powder and butter, with eight factories from Ivory Coast to Singapore.