Cargill Inc CARG.UL, one of the world's leading cocoa traders, is in the final stages of a deal to buy Archer Daniels Midland Co's (ADM.N) cocoa business, sources familiar with the discussions said, creating a price-setting global giant.
Combining two of the world's top cocoa merchants and bean grinders would create a company big enough to compete with Zurich-based Barry Callebaut (BARN.S), the world's largest maker of industrial chocolate products.
Cargill and ADM are hammering out the final details of the deal, said the sources, paving the way to the second major takeover this year in an industry that is set to be dominated by two firms. The timing of an official announcement is not known but could be made within days, the sources said.
"As the cocoa market will now be dominated by both Barry Callebaut and Cargill, the small players need to be competitive or they might risk being squeezed out of the market," said Vanessa Tan, an investment analyst at Phillip Futures in Singapore.
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