Olam unveils US$1.3b acquisition of ADM's global cocoa business

Singapore

SHARES in Olam International fell after the agri-commodities group announced a US$1.3 billion purchase of the global cocoa business of Archer Daniels Midland Company (ADM), which would turn it into one of the top three cocoa processors in the world.

The counter closed seven cents, or 3.5 per cent, lower at S$1.95 on Tuesday, its lowest level in nine months. Not helping was a broad retreat on the market.

The acquisition - Olam's largest ever - would push back Olam's goal of turning free cash flow positive by another year, though it still expects to achieve this by the end of its strategic plan in the 2016 financial year.

ADM's cocoa business will add eight factories, 10 warehouses, four innovation centres and more than 1,500 employees to Olam's current cocoa sourcing …