logo
Share SHARE
FONT-SIZE Plus   Neg

ACCC Says Will Not Oppose Archer Daniels Midland Acquisition Of Graincorp

The Australian Competition and Consumer Commission or ACCC, announced Wednesday that it does not propose to oppose US grain processor Archer Daniels Midland Co.'s (ADM) proposed acquisition of Australian grain handler and processor GrainCorp Ltd. (GRCLF, GNC.AX).

The ACCC had commenced the public review of the proposed deal on May 3 after Archer Daniels completed the confirmatory due diligence of GrainCorp that was required as per the takeover bid implementation deed signed by the two companies in late-April.

"The ACCC concluded that the proposed acquisition would be unlikely to substantially lessen competition as the merged entity would continue to face competition from a number of sources," ACCC Chairman Rod Sims said.

The review by ACCC involved consultation with grain growers, industry bodies and competitors about the likely effect of the proposed transaction on competition.

Decatur, Illinois-based Archer Daniels and GrainCorp signed a takeover implementation deed on April 25 for ADM to acquire GrainCorp for effective cash payment of $13.20 per share, including $12.20 cash per share and permitted dividends totaling $1.00 per share.

The offer price represents a 49 percent premium over GrainCorp's closing price of A$8.85 on October 18, the day of the last undisturbed share price before ADM first approached GrainCorp.

On Monday, ADM lodged with the Australian Securities and Investments Commission its bidder's statement for an all-cash, off-market takeover offer for GrainCorp. The GrainCorp Board has also unanimously recommended shareholders accept the offer, in the absence of a superior offer.

ADM currently holds a 19.85 percent stake in GrainCorp after it acquired a 10 percent stake in the grain handler at A$11.75 per share in October 2012 and added another 5 percent stake at A$12.20 per share in December 2012.

The company had received approval from the Australian Foreign Investment Review Board to acquire up to 19.9 percent of the shares in GrainCorp.

ADM already has a presence in Australia through its holding of an 80 percent stake in smaller grain handler Toepfer International. The company expects the acquisition of GrainCorp to enable both the companies to be better positioned to connect Australia's farmers with the growing demand for crops and food, particularly in Asia and the Middle East.

GrainCorp, which owns about half of the grain-storage facilities in Eastern Australia, boasts a total grain storage capacity of up to 20 million tons. The company has a market capitalization of A$2.86 billion.

ADM closed Wednesday's regular trading session at $33.58, up $0.41 or 1.24% on a volume of 4.00 million shares.

In Thursday's regular trading session, GNC.AX is currently trading on the ASX at A$12.56, up A$0.02 or 0.16% on a volume of 0.10 million shares.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Teens and young adults now find Instagram and Snapchat more attractive than Facebook, a new study by eMarketer revealed. The report also suggested that for the first time, Snapchat might overtake Facebook in the U.S. by gaining a marketshare of 40.8 percent in social network. A new survey has shown that a majority of parents as well as teens agree that texting or use of cell phones are the biggest distraction to teen drivers. The survey also found that risky driving behavior seems to run in the family. The 2017 Family Safe Driving Report was released by EverQuote Inc., a venture-backed online insurance marketplace. Less than two months after its debut on the New York Stock Exchange, embattled meal-kit delivery company Blue Apron Holdings Inc. has been hit with multiple shareholder lawsuits for its "misleading" and "untrue" statements in its IPO prospectus. The various lawsuits mirror each other in their allegations against Blue Apron, its CEO, CFO, directors and the underwriters of its IPO.
comments powered by Disqus
Follow RTT