(Adds comment from a critic of the approval, details on flour
market, paragraphs 9-11)
By Diane Bartz
WASHINGTON May 20 ConAgra Foods Inc,
Cargill Inc and CHS Inc won U.S. antitrust
approval on Tuesday to merge their North American flour mill
operations after agreeing to sell four mills to a Japanese
The companies had announced in March 2013 that ConAgra Foods
Inc would join Horizon Milling, a joint venture of Cargill Inc.
and CHS Inc that is the largest flour miller in America. CHS is
owned by farmers and cooperatives. The combined company will be
called Ardent Mills.
Horizon Milling is already the largest U.S. flour miller,
Archer Daniels Midland is the second-largest and ConAgra is No.
To secure Justice Department approval, the grain and
food-handling companies agreed to sell four mills to Miller
Milling Co, a U.S.-based unit of Tokyo-based Nisshin Flour
Milling Inc, which is a subsidiary of Nisshin Seifun Group Inc
The mills to be sold are Horizon's facility in Los Angeles
and ConAgra's facilities in Oakland, California; Saginaw, Texas;
and New Prague, Minnesota.
"Without the Antitrust Division's required divestitures, the
creation of Ardent Mills would have resulted in less competition
in the sale of wheat flour, resulting in customers, such as
industrial bakers and food service companies, paying higher
prices for wheat flour," said Renata Hesse, a deputy assistant
attorney general at the Antitrust Division.
The three companies are pleased with the approval, and the
new entity will begin operations around the end of May, the
companies said in a joint release. Under agreement with the
Justice Department, this cannot be done until the four mills are
"We strongly believe in the merits of this transaction and
the benefits it will bring to customers, consumers, wheat
suppliers, shareholders and employees," said Paul Maass,
president of Private Brands and Commercial Foods for ConAgra
Patrick Woodall of Food and Water Watch, which has asked for
the deal to be blocked, said the required asset sale was
inadequate since Ardent would have five of seven mills in the
northeastern United States, between Boston and northern
And even with the divestiture of a Minnesota mill, Ardent
will still have half of the flour mills in the St.
Paul-Minneapolis area, he said.
Horizon, which is owned by Cargill and CHS, has 20 mills
that can produce about 27 million pounds of flour a day while
ConAgra's 21 mills can produce 23 million pounds of flour, the
Justice Department said in a court filing.
In afternoon U.S. trading, Conagra shares were down 0.4
percent and CHS shares were down 0.2 percent.
(Editing by Ros Krasny, Doina Chiacu and Eric Walsh)