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Archer Daniels Midland to Pay $3.1B for Wild Flavors

Stocks in this article: ADM

NEW YORK (The Deal) -- Agricultural giant Archer Daniels Midland (ADM) on Monday agreed to buy Wild Flavors GmbH to expand its natural flavors business.

Decatur, Ill.-based ADM would pay 2.3 billion euros ($3.1 billion) to buy Wild Flavors from Hans-Peter Wild, son of its namesake founder, and minority shareholder Kohlberg Kravis Roberts & Co. LP. The buyer will also absorb 100 million euros in liabilities from the target.

"Natural flavor and ingredients is one of the largest and fastest-growing consumer trends in both developed and emerging markets, and Wild Flavors is the world's leading provider of natural flavor systems to the food and beverage industry," said ADM Chairman and CEO Patricia Woertz in a statement.

Wild and KKR in March began looking for a buyer as the company also contemplated an initial public offering. At the time, the discussions were rumored to possibly be a price-finding move to allow KKR to buy Wild out or, possibly, the other way around.

KKR bought a 35% stake in the business in January 2010 in hopes of accompanying the company to its listing.

ADM said Wild, which is based in Zug, Switzerland but operates out of Eppelheim, Germany, home to other Wild-owned food businesses, is expected to have 1 billion euros in sales this year. It sells complete flavoring packets, rather than just individual flavorings, as well as juice concentrates.

The acquisition is expected to close by the end of the year and expand ADM's flavorings division to annual sales of $2.5 billion.

It's been a bumper crop of dealmaking for ADM over the past year as it works to concentrate on its grains business. It's working to sell its chocolate operations after a failed auction at the end of the year and was also snubbed by the Australian government in an attempt to buy Sydney-based GrainCorp Ltd. for $3.2 billion.

In April it announced a sale of its fertilizer businesses in Brazil and Paraguay to Plymouth, Minn.-based Mosaic Co. for $350 million. It also acquired the outstanding shares of Hamburg, Germany-based Alfred C. Toepfer International Inc., an agriculture company, for 83 million euros.

Barclays plc acted as financial adviser to ADM with a Skadden, Arps, Slate, Meagher & Flom LLP team of Matthias Horbach, Richard Witzel, Jr., Ingrid Vandenborre, Ian G. John, Johannes Frey, and Ulrich Ziegler providing counsel.

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