Milling & Baking News - February 3, 2004 - 9

B U S I N E S S

Cargill agrees to merge fertilizer
business with IMC Global
MINNEAPOLIS - Cargill, Inc. and
IMC Global Inc. said on Jan. 27 they had
reached a deﬁnitive agreement to merge
Cargill Crop Nutrition with IMC.
The businesses would be combined
into a publicly traded global fertilizer company. Neither the name nor the
headquarters location of the new company have been determined yet.
Cargill estimated that the new company would have assets of $5.4 billion,
annual sales of $4.1 billion and trailing
annual EBITDA of $440 million.
Under terms of the agreement, Cargill
would own 66.5% of the new company.
Holders of IMC Global common shares
and convertible preferred stock will
each have the right to receive one share
of common or preferred, respectively,
of the new company's stock for each
share they own. To protect Cargill from
dilution from the IMC preferred shares,
the agreement calls for Cargill to receive
5,458,955 shares of Class B shares that
automatically convert into common

stock simultaneous with the preferred
stock conversion.
The fact that the transaction leaves Cargill with a stake in the fertilizer industry
was emphasized by Warren Staley, chairman and chief executive ofﬁcer. "This
transaction underscores our conﬁdence
in the industry and commitment to growing the fertilizer business," he said.
The new business will be headed by
Frederic W. (Fritz) Corrigan, currently
a Cargill executive vice-president. Mr.
Corrigan will leave Cargill to assume
the new post. He has been with Cargill
since 1966 and was named president of
worldwide fertilizer in 1992. During the
early 1980s, Mr. Corrigan headed the
ﬂour milling business at Cargill.
An 11-member board of directors will
be established for the new company, the
majority of whom will be independent
directors. Seven of the 11 will be appointed by Cargill, including the chairman, and four by IMC Global.
The new company will account for

Dismissed employe alleges
sales 'loading' by General Mills
MINNEAPOLIS - A terminated retail customer manager last week alleged that General
Mills, Inc. executives told employes to ship
extra products ahead of customer demand.
Jeffrey Millard, a suburban Phoenix
manager who was ﬁred last year, said
General Mills routinely shipped customers
merchandise early, sending as much as 20
weeks' worth when only two weeks' volume might have been wanted.
In a telephone interview with The Associated Press, Mr. Millard said General
Mills most often "loaded" cereal shipments
because it was especially proﬁtable. He said
that in some cases, General Mills paid retailers to take deliveries before their normal
schedules so the company could book the

sale to meet quarterly goals.
Mr. Millard, who said he was ﬁred Feb.
27, 2003, after 14 years with the company,
is suing General Mills in Arizona state
court and in federal court for wrongful
termination.
Marybeth Thorsgaard, a General Mills spokeswoman, said the
company's practices are proper. She
declined further comment because of
the lawsuit and an ongoing investigation by
the Securities and Exchange Commission.
In October, General Mills said the S.E.C.
had requested information about its sales
practices and related accounting. The company has said its business and accounting
practices are proper and comply with all

Brinker forms nutrition advisory group
to assist in tracking evolving trends
DALLAS - Brinker International has
formed a Nutrition Advisory Council to
help it track "evolving trends in nutrition
and lend guidance to ongoing culinary development" at all Brinker concepts.
Brinker, which owns, operates or franchises more than 1,400 restaurants under
such names as Chili's Grill & Bar, Romano's
Macaroni Grill, On the Border Mexican
Grill & Cantina and Corner Bakery, said the
10 / Milling & Baking News, February 3, 2004

council will include third-party experts who
will join a cross-functional Brinker group.
The outside participants in the council
include Mark Erickson, vice-president of
continuing education for the Culinary Institute of America; Kathleen Duran, director of
nutrition for the Cooper Wellness Program
at the Cooper Aerobics Center; and Laura
Donahue, director of the culinary center of
excellence at ConAgra Foods, Inc.

14.4% of global phosphate capacity with
annual phosphate production capacity of
13 million tons. Through IMC's existing
business, the new company will have an
annual 15.5% share of worldwide potash
capacity.
Cargill Crop Nutrition has 3,200 employes in 17 countries while IMC Global
has 5,000 employes in North America.
With a market capitalization of $1.1 billion (before the merger announcement),
IMC Global shares trade on the New
York Stock Exchange.
The transaction is subject to regulatory approval in several countries, including the United States, Brazil, Canada
and China, as well as the approval of
IMC Global shareholders. The deal also
is contingent on the completion of the
Phosphate Resources Partners Limited
Partnership unit exchange as authorized
by the IMC Global board on Jan. 14
under which holders of publicly traded
PLP units would be offered an exchange
rate of 0.20 shares of IMC Global common stock for each PLP unit. Closing,
which also is subject to other customary
conditions, is anticipated in the summer
of 2004. MBN

applicable regulations.
G. Leonard Teitelbaum, a senior analyst
with Merrill Lynch, in a report on the allegations said "trade loading is a practice that
has been abandoned by most companies, but
on the other hand, was employed by almost
every large food company that we follow.
In the case of General Mills, if the allegations set forth by the dismissed
employe prove to be accurate, the
question would be whether or not
earnings over a reasonable cycle were
affected. This is something that General Mills will have to answer.
"We are comfortable stating that with
the possible exception of new product activity, which requires putting inventory in the
hands of retailers prior to promotional introductions, and is indeed a proper practice,
General Mills' inventory shipments are within the bounds of good business practices." MBN

The group will evaluate the success of
new menu initiatives in progress at Brinker's three largest concepts.
Most of Chili's 900-plus locations now offer guests a feature menu card that includes
14 new low-carbohydrate appetizers, salads
and entrees. At the more than 200 Macaroni
Grill locations, a variety of lower-carbohydrate side items are offered along with
whole wheat penne pasta.
On the Border last month introduced lowcarbohydrate sauteed vegetables for traditional Mexican rice and beans. MBN
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Milling & Baking News - February 3, 2004

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