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ADM Acquires Wild for €2.3 Billion

Posted: July 7, 2014

Confirming earlier rumors, Archer Daniels Midland Co. (ADM; Decatur, Illinois) has announced that it is acquiring Wild Flavors GmbH, boosting its innovation and beverage capabilities. The all-cash transaction is valued at about €2.3 billion.

Wild Flavors has more than 3,000 customers worldwide and estimated 2014 net revenues of about €1 billion.

According to ADM, "The transaction is contingent on regulatory approvals and is expected to close by year end"

The move follows earlier reports about potential suitors or an IPO.

Of the move, Hans-Peter Wild, chairman of Wild Flavors GmbH, said, “I am very pleased by ADM’s acquisition of Wild Flavors and the future business we will build together. Wild Flavor’s unique natural flavors strength and total systems approach will create a very strong and positive development platform within ADM for our customers as we continue to drive innovation in the food and beverage industry. With the strong financial resources, and expanded customer base, product offering and global footprint, I am confident Wild Flavors will be well-positioned for growth.”

“This acquisition expands ADM’s ability to serve customers’ evolving needs today and well into the future,” said ADM chairman and CEO Patricia Woertz. “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.”

Woertz added:

Together, ADM and Wild Flavors will create one of the leading flavor and specialty ingredient companies in the world, with sales approaching $2.5 billion and significant room to grow. Wild Flavors will be able to reach more customers with an expanded portfolio of innovative ingredients. And ADM, with our own sizeable specialty ingredient business, will have an enhanced platform for the commercialization of our higher-margin food and wellness ingredients.

Together, we will be uniquely positioned to offer a broad range of customers—from the largest CPG’s to fast-growing innovators—comprehensive systems-based solutions for food, beverage and personal care products. With our combined global networks, world-class research & innovation capabilities, WILD Flavors’ natural flavor systems, and ADM’s texture, nutrition and functional solutions, we will create an unmatched capability to respond to local consumer preferences and offer complete food solutions that taste great.

The addition of WILD Flavors balances and extends our value chain. It is consistent with our long-term strategy to diversify the crops we process and expand and diversify our product portfolio. It complements the ingredient, organic-growth investments we’ve recently made—including our Brazil protein complex and soluble-fiber expansion in China. And it is consistent with actions we’ve taken to dampen the volatility of our earnings mix and deliver on our commitment to profitable growth. The acquisition will meet our return objectives, with estimated cost and revenue synergies of €100 million by year three.

We have tremendous respect for the culture and business that Dr. Wild has built. Given the strong brand Wild Flavors has with customers around the world, we intend to maintain the Wild Flavors name and grow the brand and the innovative, entrepreneurial culture that sustains it. We appreciate the difference in our business models, and will support continued success of the Wild Flavors model by establishing a new business unit called Wild Flavors and Specialty Ingredients. The new unit will include many of our specialty ingredients. We are also excited to work with the Wild Flavors team. With more than 400 scientists and applications specialists and a global sales force, they will bring exceptional expertise and new capabilities.