Justice Department Seeks More Information on Ingredion-Penford Deal

By Angela Chen 

Food-ingredient producers Ingredion Inc. and Penford Corp. have received requests for more information about their planned merger agreement from the U.S. Department of Justice, extending the waiting period for the deal.

The merger can't take place until 30 days after both companies have resolved any concerns, the details of which were not disclosed in a regulatory filing.

In October, Ingredion agreed to buy Penford for about $240 million in an all-cash deal. Ingredion, a major supplier of sweeteners and starches for the food industry, has been eager to add to the company after completing its acquisition of National Starch, a unit of Akzo Nobel N.V., for $1.3 billion in 2010.

The merger was intended to combine the companies' complementary product portfolios. Ingredion Chief Executive Ilene Gordon specifically highlighted how the deal would expand the company's capabilities into the manufacturing of specialty potato starches, while broadening its range of products to meet growing consumer demands for nutritious, environmentally friendly and gluten-free foods.

Sweetener sales have been falling in a more health-focused age, and Ingredion has been hurt in recent quarters due to weakness in the South American market. During the summer, Ingredion warned that a big drop in commodity prices, such as for corn this year, would help lower costs, but that sales would likely also decline.

Shares of Ingredion are up about 27% this year.

Write to Angela Chen at [e-mail]

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