Minnetonka-based Cargill is expanding its chocolate business.
The agri-business giant is buying Archer Daniels Midland's global chocolate business for $440 million, a transaction that includes six production plants in North America and Europe.
Cargill officials say the acquisition is a major milestone in the company's chocolate growth strategy, giving customers access to a broader and innovative product mix. In acquiring the ADM business, Cargill will add several brands and about 700 employees.
The deal, which requires regulatory approval, comes as the cost of cocoa — a key ingredient in chocolate — has been rising. But chocolate is a good business to be in, company spokesman Pete Stoddart said.
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"There's great opportunities out there," Stoddart said. "It's a steady and growing market in places like Asia and the Middle East and it's great business here in North America and in Europe, as well."
Cargill does not reveal sales for its chocolate business. But in its most recent fiscal year, the privately-held company earned $1.9 billion on sales of $135 billion.
The company is involved in all aspects of chocolate-making — from buying and transporting cocoa beans to producing chocolate. The added plants will increase Cargill's capacity, particularly in North America.
"We've been in the cocoa and chocolate business around the world a long time. It's an industry we want to grow in," Stoddart said. "We were able to find a great opportunity and add locations that really give us an immediate head-start on our growth strategy to be stronger in the chocolate market."