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Archive for Wednesday, January 14, 1998

KOCH BUYS PURINA MILLS

January 14, 1998

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Koch could supplyPurina Mills with other byproducts for use as feed.

Wichita (ap) -- Koch Agriculture Co. said Tuesday it had signed an agreement to acquire St. Louis-based Purina Mills Inc., the nation's largest commercial feed manufacturer.

The sale is expected to close in about 45 days. Terms of the agreement were not disclosed. But Purina Mills spokesman Max Fisher said Koch had agreed to acquire all of PM Holdings Corp.'s common stock and assume Purina Mills' outstanding debt.

Purina Mills produces about 5 million tons of animal feed annually, about 10 percent of the U.S. commercial feed market. It has 59 plants, most in the central and southwest United States.

No layoffs or plant closures were expected, Fisher said. The company would continue to be headquartered in St. Louis and use its brand name and logo.

Koch wants to help Purina Mills grow and protect the quality of the brand, said Koch spokesman Jay Rosser.

``It's a household brand name,'' he said.

Fisher said Koch could help Purina Mills begin using other by-products in its feed. One possibility, he said, was adding more vegetable by-products, like leftover potatoes from french fry production. Koch has the technology to process alternative by-products that can be used as additional ingredient resources, Fisher said.

Purina Mills, a subsidiary of PM Holdings Corp., has 3,000 employees, and more than $1.2 billion in sales in 1996. The company sells its products through a network of more than 4,000 independent dealers and 4,000 direct customers. Those products include commercial feed for cows, pigs, chickens and fish. The company also makes feed for companion animals like horses and rabbits.

Koch Agriculture Co. produces animal feed, fertilizers, finished meat products, wheat and flour. It is a subsidiary of Koch Industries Inc., the nation's second-largest privately held company behind agribusiness giant Cargill. It entered the grain business in 1991 with its purchase of Evans Grain Co., a storage company based in Salina, and several entities owned by Evans.

Koch also owns the nation's 11th-largest cattle-feeding operation, with three lots in Kansas and one in Texas. Purina Mills is a major manufacturer of cattle feed.

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