Friday, October 16, 2015

Olam Buys Archer Daniels’s Cocoa Business for $1.2 Billion

http://www.wsj.com/articles/olam-buys-archer-danielss-cocoa-business-for-1-2-billion-1445021737

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Olan, based in Singapore, has agreed to buy Chicago based ADM's cocoa business for $1.2 billion dollars. ADM has said that they wanted to exit the cocoa business because it is extremely competitive and that they want to focus on higher profitable businesses.

Because of this deal, Olan is now the largest cocoa processor and will now be able to process up to 700,000 pounds of product per year. In addition to becoming the largest processor of cocoa, the deal will save Olan an estimated $40,000,000 in operating costs by year 2018. Olan will now be a part of the chocolate making process from cocoa farms in Africa to the chocolate producing companies in Switzerland.

This article directly relates to chapters 8 and 12. Olan was looking to expand its reach into foreign countries and has done so by purchasing a foreign company. Because of this deal, the company now has processing plants in 12 countries worldwide.

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