The US corn processor sold back its 23% shares and equity interests to Gruma for $450m up front, with a further $60m agreed in future contingent payments over the next 42 months.
The two firms entered into talks earlier this month on December 5 to initiate the sale.
ADM said the decision to sell back its interest in the Mexican firm formed part of a wider strategy to drive profitability.
Ray Young, chief financial officer for ADM, said: “This sale is part of our ongoing portfolio management actions to redeploy capital into key strategic areas that will help drive higher returns in the future.”
The Mexican firm also said the deal would “generate a significant economic benefit and substantial creation of value for Gruma”.
Eyes on GrainCorp
Over the past two months, ADM has been bidding to buyout Australian bulk grains specialist GrainCorp in a move its CEO Patricia Woertz said would “meet ADM’s key financial hurdles” and expand its business outside the US.
However, ADM has had both of its bids have been rejected as GrainCorp said they materially undervalued the business.
Despite two rejected offers, ADM’s spokesperson Jackie Anderson, said it would continue to consider all options with respect to its 19.9% shareholding in the Australian grains firm.
Sale breakdown
ADM has held its stake in Gruma since 1996. It said that while it has now exited from its ownership position in Gruma and related investments, it expects to maintain a “healthy and strong commercial relationship with Gruma globally”.
The full deal will see ADM sell back its 23.16% shares in Gruma, 40% of its shares in Gruma’s Mexican wheat flour business Molinera de Mexico and 100% of Valley Holding shares – a company that owns 20% of Gruma’s US corn flour business Azteca Milling. It will also sell back the 3% of its partnership interest of holding companies Valores Mundiales and Consorcio Andino.