U.S.-based Archer Daniels Midland (ADM)’s $2 billion bid to take over Australian Grain Corp. Ltd. was blocked by the Australian government, stating that the A$12.20 per share bid is not in the nation’s best interest, and that now is not the right time for a 100% foreign takeover of such a key Australian business. After the rejection, Grain Corp. closed down 22% in Sydney at A$8.72. ADM has stated it will not appeal the decision, however it will wait for a change in political climate to once again attempt control. This deal would have been the largest for ADM after its $470 million purchase of WR Grace & Co.’s cocoa business in 1996. Although denied a full takeover, Australian treasurer Mr. Hockey states he would likely support ADM increasing its stake in Grain Corp. from 19% to 24.9%. Buying Grain Corp. would have given ADM control of 280 storage sites and seven of the ten ports that ship grain in bulk from Australia’s east coast.
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