Cargill acquires fats and oils business from Goodman Fielder
Goodman Fielder has announced the sale of its Commercial division edible fats and oils operations to Cargill for $240 million.
The ASX-listed manufacturer announced they would proceed with a sale earlier this year as they look to focus on their consumer brands.
The deal will enhance Cargill’s operations in Australia, which already include oilseed processing and further value adding, grain and oilseed merchandising, bulk handling,
flour milling through its Allied Mills joint venture, and beef processing.
“The business, which processes edible fats and oils and supplies food manufacturers and wholesalers in Australia and New Zealand, will be divested for a price of A$240 million,” Goodman Fielder’s Managing Director, Peter Margin, said. “This is a significant premium to the carrying value of the business.”
“As a consequence of our strategic decision earlier this year to focus on our consumer brand portfolio, we decided that, as a commercial industrial business, it did not fit
comfortably with our major strategic focus, and that therefore the funds employed in this business would be better utilised elsewhere.”
“I am pleased that Cargill will be taking ownership of the business as this will be an excellent outcome for the business, for Goodman Fielder and for our loyal and hardworking people who will find a much better fit for their skills in a more comparable business. I want to thank them sincerely for their excellent work under Goodman Fielder ownership and I wish them well for their future with Cargill,” he added.
The sale agreement includes a 10 year supply agreement whereby Cargill will supply refined fats and oils products to Goodman Fielder in multiple formats for Goodman
Fielder’s Home Ingredients brands and businesses.
The asset sale includes the Commercial business’s four fats and oils refining facilities. Goodman Fielder will retain title to the land at the Brisbane facility, subject to an
extended lease back to Cargill. Goodman Fielder’s New Zealand flour milling operations are not part of the sale and the company will also retain ownership of the part of its food service operations that does not relate to fats and oils.
The sale remains subject to a number of regulatory conditions, including ACCC approval.