Donnelly Ritigstein Law Offices
Call for a Free Consultation
Toll Free 866-907-6368 Local 856-324-6147

Cargill and Archer Daniel Midland plan sweet business merger

Millions of people nationwide and in New Jersey love chocolate, but not many stop to consider how the sweet treat is made. A crucial step in the process of making the chocolate confections that Americans consume on a daily basis is the processing of cocoa. Archer Daniel Midland, one of the companies that provides this service, has agreed to a business merger with Cargill, a commodity giant.

If the $2 billion deal is approved and completed, Cargill will do an estimated 35 percent of the world's cocoa processing. There used to be over 10 companies worldwide that processed cocoa. However, this merger would reduce that number, leaving 60 percent of the world's cocoa processing handled by just two companies.

The other company is Barry Callebaut, a company based in Switzerland, which already has 25 percent of the processing market. Candy giants such as Mars and Hershey's may not be sour about the deal, but some smaller companies are concerned. There are concerns that cocoa bean farmers will not be able to charge their current prices, lowering revenues for farmers that are usually in impoverished countries. Moreover, smaller chocolatiers have concerns that prices will increase while the variety of textures and tastes will diminish -- problems that could impact chocolate lovers in New Jersey and across the country. Some have already seen such a drop, even before this merger occurs.

When large businesses such as Cargill offers a business merger with a smaller company that may be struggling, it can seem like a sweet deal. However, there are many considerations beyond the monetary ones. Business decisions and legal formalities will have to be dealt with first. Some mergers have to be approved by governmental agencies before becoming final to ensure compliance with all applicable laws and regulations for the industry.

Source: journalgazette.com, Chocolate merger builds big company, Lina Khan, Nov. 17, 2013

No Comments

Leave a comment
Comment Information

Moorestown Office
212 West Route 38
Suite 200
Moorestown, NJ 08057

Map & Directions

Haddonfield Office
132 Kings Highway E
Suite 105
Haddonfield, NJ 08033

Map & Directions

Linwood Office
327 Central Avenue
Linwood, NJ 08221

Map & Directions

Cape May Court House Office
618 Route 9 South
Cape May Court House, NJ 08210

Map & Directions

Gloucester, Cumberland and Salem County Offices
57 Euclid St.
Woodbury, NJ 08096

Map & Directions

Back To Top