ADM Closer to Possible Ethanol Exit

(Bloomberg/Crain's Chicago Business) The company is in advanced talks for a deal that could involve a sale or a joint venture for its ethanol dry mills. -- Archer-Daniels-Midland Co., the agribusiness giant that helped draw the blueprint for the U.S. biofuel industry, is in advanced talks for a deal that could involve a sale or a joint venture for its ethanol dry mills.

The 118-year old agricultural commodities company is currently in negotiations with fewer than five interested parties, Chief Executive Officer Juan Luciano said in an interview Wednesday at the company’s headquarters in Chicago. He declined to name the companies taking part in the discussions.

The American ethanol industry has been hurting after a rapid expansion fueled by a bet on increased demand from China. But President Donald Trump’s trade war with Beijing ended up stifling exports. Meanwhile, biofuel proponents blamed the U.S. administration’s policy of exempting some oil refiners from blending requirements for adding to the industry’s pain.

This is not the first time ADM, which started producing ethanol in 1978, has tried to divest its dry mills. In 2016, the company put the assets up for sale, evaluated bids and ended up deciding to keep the business. READ MORE