* Olam becomes top tier supplier to chocolate industry
* Brazil cocoa assets seen among key acquisitions
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By Sarah McFarlane and Nigel Hunt
LONDON, Oct 16 (Reuters) - Olam International OLAM.SI has
completed the acquisition of the global cocoa business of Archer
Daniels Midland Co. ADM.N in a deal valued at $1.2 billion,
the companies said on Friday.
The deal, first announced in December last year, catapults
the Singapore-based commodities firm into the top tier of global
suppliers to the chocolate business.
It boosts Olam's processing capacity to about 700,000
tonnes, behind only Barry Callebaut BARN.S and Cargill Inc.
with operations in major producing countries Ivory Coast,
Nigeria, Ghana and Brazil as well as coming markets in Europe,
the United States, Canada and Asia.
The combined entity will be looking to source from around
850,000 tonnes to 900,000 tonnes annually, Gerry Manley, Olam's
head of cocoa said.
"We want to be really focused on the cocoa products market
and supplying the chocolate industry, cocoa powder users, and
really not set ourselves up in competition to chocolate
manufacturers," Manley said.
"Most importantly of all for us from a producing country
point of view and indeed a consuming country point of view, we
get Brazil. It's the largest producing country where Olam has
not been involved before."
Manley said Olam was also looking at increasing its interest
in the Japanese market.
Japanese trading house Mitsubishi Corp 8058.T bought a 20
percent stake in Olam in August. ID:nRLP35792a
"Clearly in the joint venture Mitsubishi are looking to see
how they can increase the links with Olam in Japan and indeed
understand more about the various agricultural businesses that
we're involved with," he said.
Olam's cocoa business will continue to be headquartered in
London although the company has opened a new office outside of
Geneva where the Switzerland-based staff from ADM will be
relocating.
Olam said the acquisition was expected to be earnings,
returns and cash flow accretive in the first full year of
consolidation.
The company said the acquired business was expected to
generate earnings before interest, tax, depreciation and
amortisation (EBITDA) of between $180 million and $200 million
including synergies in 2018.