ADM Said to Near $3.4 Billion Deal to Purchase Wild Flavors

Jul 03, 2014 3:38 pm ET

(Updates with closing stock price in last paragraph.)

July 3 (Bloomberg) -- Archer-Daniels-Midland Co. is nearing an agreement to buy Wild Flavors GmbH, a maker of natural food ingredients backed by KKR & Co., for about 2.5 billion euros ($3.4 billion), people familiar with the matter said.

ADM outbid Japanese rival Ajinomoto Co. for the privately owned maker of the Capri Sun juice drink and natural flavorings for beverage and food, the people said, asking not to be named as the matter isn’t public. While a deal may get announced in coming days, a final decision hasn’t been made, they said.

The takeover would help the world’s top corn crusher diversify away from grain processing and gain a bigger foothold in overseas markets for food and beverages made with more natural raw materials. It would be the biggest acquisition ever for ADM, data compiled by Bloomberg show.

Wild Flavors, which competes with Germany’s Symrise AG and Switzerland’s Givaudan SA, has manufacturing sites across Europe, the Middle East, Asia and the Americas. In 1951, the Zug, Switzerland-based company introduced Libella, the first carbonated juice drink in Germany based only on natural ingredients.

Wild Flavors had sales of 838 million euros in 2012, according to its website. New York-based KKR, run by Henry Kravis and George Roberts, bought a stake in 2010 and now owns 35 percent, according to KKR’s website. Hans-Peter Wild, son of founder Rudolf Wild, owns the rest.

Cargill Deal

In 2012, Wild Flavors bought the juice blends business of Cargill Inc., adding more than $200 million to its annual sales and a platform to grow in Asia and North America.

ADM, based in Decatur, Illinois, plans to invest more than 60 percent of its capital expenditures into assets outside the U.S., president and Chief Operating Officer Juan Luciano said in Lausanne, Switzerland in April.

“We are still underrepresented in the rest of the world,” he said then.

Jackie Anderson, a spokeswoman for ADM, declined to comment on the offer. Representatives for Wild Flavors and KKR couldn’t immediately be reached for comment.

ADM rose 1 percent to $45.77 at the close in New York today, the highest since April 2008. That values the company at about $30 billion.

--With assistance from Andrew Noel and Kiel Porter in London.