ADM and Alltech to form North American animal feed joint venture

CHICAGO & LEXINGTON - ADM (NYSE:ADM) and Alltech announced Tuesday they have signed a definitive agreement to create a North American animal feed joint venture, combining their complementary feed operations across the United States and Canada.

The partnership, expected to launch in the first quarter of 2026, will be majority-owned by Alltech with equal board representation from both companies. The venture will combine Alltech’s Hubbard Feeds and Masterfeeds businesses, including 18 U.S. feed mills and 15 Canadian facilities, with ADM’s 11 U.S. feed mills. The deal comes as ADM’s stock has shown strong momentum, posting a 32% gain over the past six months, with InvestingPro analysis suggesting the stock is currently slightly undervalued.

The joint venture aims to leverage the companies’ manufacturing capabilities, nutrition science expertise, and existing product portfolios to serve livestock, equine, and other animal feed markets.

"As the animal nutrition industry continues to reshape itself to support a growing global population, Alltech and ADM are bringing together passionate teams, proven products and shared values," the companies said in a joint statement included in the press release.

Alltech will retain its Ridley Block Operations, Ridley Feed Ingredients and specialty ingredients businesses, which will serve as suppliers to the new venture. Similarly, ADM will keep its Canadian locations and U.S. premix and additive businesses, which will also supply the joint venture.

The companies have a longstanding relationship dating back to when ADM was Alltech’s first customer. The transaction remains subject to regulatory approvals and other closing conditions.

The announcement comes as the animal nutrition industry adapts to meet growing global demand for protein while facing supply chain and sustainability challenges. ADM brings significant financial strength to this venture, having maintained dividend payments for 55 consecutive years and achieving a healthy free cash flow yield. For deeper insights into ADM’s financial metrics and growth potential, investors can access comprehensive analysis through InvestingPro’s detailed research reports, available for over 1,400 US stocks.

In other recent news, Archer Daniels Midland (ADM) has exceeded its 2025 regenerative agriculture goal, achieving sustainable farming practices on over 5 million acres, a year ahead of schedule. This milestone, outlined in the company’s third annual regenerative agriculture report, surpasses its 2024 target of 3.5 million acres. UBS has maintained its Buy rating on ADM, raising the price target to $70 due to robust crush spread margins and improvements in the nutrition business. UBS also revised its earnings per share estimates for 2025 upward to $3.93. Meanwhile, JPMorgan has assumed coverage of ADM with a Neutral rating and a price target increase to $61, highlighting potential earnings benefits from improved margins in the Crushing and Nutrition segments. Additionally, ADM’s Board of Directors declared a quarterly cash dividend of 51 cents per share, marking 93 years of consistent payments.

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