ConAgra's Ardent Mills to Start Production - Analyst Blog

Food products company, ConAgra Foods, Inc. CAG is nearing the final stage of forming the joint venture with privately owned Cargill Inc. and CHS, Inc. — Ardent Mills. The mill is expected to start production on or about May 29, 2014. The move comes ahead of the completion of all regulatory review from the U.S. Department of Justice, along with all international regulatory clearances.

The mill comes into effect through the collaboration of ConAgra's North American flour milling businesses and Horizon Milling, a Cargill-CHS joint venture formed in 2002. However, before the mill becomes operational, ConAgra and Cargill will sell off four flour milling facilities to a U.S. subsidiary of Tokyo-based Nisshin Flour Milling Inc. — Miller Milling Company.

Ardent Mills will operate independently, though ConAgra and Cargill will have a 44% ownership each, and the remaining 12% will be owned by CHS. Also, each company will have its representatives on the board of directors. The mill is expected to offer services to customers in the baking and food industry.

The production of Ardent Mill is expected to be supported by a specialty bakery, three bakery mix facilities and 40 flour mills, located across the U.S., Canada and Puerto Rico. ConAgra expects to receive roughly $400 million from the close of this transaction, which it intends to utilize to accelerate debt repayment.

With a market capitalization of $13.2 billion, ConAgra holds a Zacks Rank #3 (Hold). Some better-ranked stocks worth a watch in the same industry include BRF S.A. BRFS, The Hain Celestial Group, Inc. HAIN and Inventure Foods, Inc. SNAK. While BRF sports a Zacks Rank #1 (Strong Buy), The Hain Celestial Group and Inventure Foods have a Zacks Rank #2 (Buy).

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