ConAgra, Cargill, CHS to Form Flour-Milling JV

ConAgra Foods Inc. (CAG), Cargill Inc. and CHS Inc. (CHSCP) agreed to form an independent joint venture, combining their North American flour-milling businesses into a new company called Ardent Mills.

The new company will combine ConAgra Mills and Horizon Milling, a Cargill-CHS joint venture formed in 2002. It will serve customers in the baking and food industries, offering services including product development resources, technical and application support, supply-chain management and commodity price risk management.

ConAgra Foods, Cargill and CHS will contribute their respective milling operations to the new company on a cash-free, debt-free basis in exchange for ownership interests. Sales for ConAgra Mills were about $1.8 billion in its last fiscal year, while Horizon Milling's were about $2.5 billion.

The owners intend to receive cash distributions from Ardent Mills at closing, with initial estimates of the total proceeds to be $800 million to $1 billion.

Dan Dye, who currently serves as president of Horizon Milling, will lead Ardent Mills as chief executive. He will be joined by Bill Stoufer, current president of ConAgra Mills, as Ardent Mills's chief operating officer and chief integration officer.

The company's operations and services will be supported by 44 flour mills, three bakery mix facilities and a specialty bakery, all located in the U.S., Canada and Puerto Rico. The location of its headquarters will be determined later, the parent companies said.

ConAgra Foods and Cargill will each own a 44% stake in Ardent Mills, with CHS owning a 12% interest. All three companies will have representatives on Ardent Mills' board.

The formation of Ardent Mills is expected to be completed in late 2013.

The owners intend for Ardent Mills to be self-financed through cash flow from operations and its own bank debt and credit facility.

ConAgra's shares were up 13 cents at $34.83.

Write to Ben Fox Rubin at [e-mail]

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