A federal judge has approved the court-ordered sale to Anheuser-Busch of Pacific International Rice Mills Inc. by the Rice Growers Assn. of California, it was announced Monday.
As a result of the sale, proposed last March, Rice Growers will recover virtually all of the funds invested in buying the PIRMI operation two years ago.
The Justice Department had successfully challenged the $12-million acquisition as anti-competitive, since Rice Growers already milled and marketed about half of the state's rice crop, prompting a divestment order by U.S. District Judge Edward Garcia in Sacramento. Garcia approved the transaction last Thursday, RGA said, and Anheuser-Busch on Friday assumed operation of PIRMI, which is headquartered in Woodland, about 15 miles west of Sacramento.
Michael L. Cook, RGA's president and chief executive, said the grower-owned cooperative will receive about $12.3 million, making the deal "just about a break-even proposition."
Under Garcia's order, RGA, based in West Sacramento, had furnished working capital for PIRMI but otherwise maintained an arm's length management posture. Cook said RGA will recover all funds advanced to PIRMI, plus interest.
The Anheuser-Busch subsidiary that acquired PIRMI--marking the brewer's entry into the California rice-milling business--is Busch Agricultural Resources Inc.
Busch does not intend to use the plant to produce brewing rice, as it does at a similar facility in Jonesboro, Ark., a spokesman said when the sale was announced, but it will continue to mill medium-grain rice for retail sale as a part of the brewer's diversification program.
Cook, who joined RGA last September after the issuance of the divestment order, said the sale will have no effect on current operating results but will have a "dramatically positive effect" on the cooperative's balance sheet in terms of an improved debt-to-equity ratio and working capital.
"This transaction allows our association to close this chapter of its history and to turn its full resources to the task of meeting future marketing opportunities," Cook said in a statement.