Japan’s Sumitomo Corp. has announced that it has acquired the remaining 50% of its joint venture partner, Australia’s Emerald Grain it did not already own for approximately $240 million. The Australian Foreign Investment Review Board (FIRB), the Australian government, and the Australian Competition Consumer Commission have all approved the acquisition. Despite the purchase price being below the $248 million threshold requiring approval, Sumitomo submitted an approval application as a cautionary measure after ADM’s offer for GrainCorp was refused. Emerald has expressed plans to double its grain purchases from 4.5 million tons to 9 million tons to become Australia’s third largest grain trading company behind GrainCorp and Cargill AWB and to build additional ports in New South Wales and Western Australia. Achieving these goals would require $80-$150 million in capital over the next two years. Sumitomo’s purchase will provide the needed capital and the company will go on to run Emerald as an independent subsidiary.
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