Archer Daniels Midland, the leading US ethanol producer, on Friday won conditional approval from US antitrust authorities to acquire privately owned Minnesota Corn Processors LLC, a smaller rival.
Minnesota Corn will have to dissolve a joint venture with Corn Products International, a competing corn wet miller, as part of an agreement with the US Justice Department for approval of the deal.
"The dissolution of the MCP/CPI joint venture will ensure that purchasers of corn syrup and high fructose corn syrup continue to receive the benefits of competition - lower prices," Charles James, head of the department's antitrust division, said in a statement.
The $396.2 million (€403m) purchase would add 140 million gallons of ethanol production capacity to ADM's current annual production of 950 million gallons. Corn-based ethanol is a gasoline additive that helps the fuel burn cleaner.
Minnesota Corn produces ethanol, corn starch and corn sweeteners at two processing plants in Minnesota and Nebraska. Shareholders of that company voted to approve the deal on Thursday.
Under the agreement,ADM will have to dissolve the partnership by the end of the year.
ADM chief operating officer Paul Mulhollem said in a statement that the acquisition will increase efficiency and bolster the company's position in the markets for corn sweeteners, other corn products and expanding ethanol markets.
ADM, which operates three corn wet milling plants in the United States, reported more than $1 billion in revenue from sales of corn wet milled products, the department said. MCP posted $400 million in revenues from the sale of corn wet milled products.
ADM competes with four other firms to sell corn syrup and high fructose corn syrup in the United States and Canada, including MCP's joint venture with Corn Products International.