ADM to sell stake in Australia’s agribusiness firm GrainCorp

02.12.2016

US agricultural processor and food ingredient provider Archer Daniels Midland (ADM) has entered into an agreement to sell stake in Australian agribusiness company GrainCorp.

Under the terms of the agreement, ADM will sell 19.9% ownership stake in GrainCorp for about AUD387m($286m).

ADM chairman and CEO Juan Luciano said: “As part of our ongoing portfolio management, we carefully considered our equity investment position in GrainCorp and determined that we could better meet our long-term returns objectives by reallocating that capital.”

ADM said that the transaction will be executed by way of an underwritten sale to an underwriter.

The company will sell all of its 19.9% investment in the issued capital in GrainCorp at a price of AUD$8.53 per share.

Luciano said: “This transaction will allow us to further reduce our invested capital, and it will provide cash that we can redeploy to higher-return investments as we continue to execute our balanced capital-allocation framework.”

In November 2013, the Australian government rejected ADM proposed acquisition of GrainCorp for A$3.4bn ($3.1bn), saying that the deal would go against the national interest.

GrainCorp, based in Sydney, Australia, receives, handles and exports grain and other bulk commodities, including wheat, barley and oilseeds.

At the time of the proposed deal, GrainCorp operated a network of 280 storage facilities and its seven storage and loading facilities control more than 90% of eastern Australia's bulk grain exports.

In December last year, GrainCorp expanded its grain origination footprint in Canada, through the establishment of a joint venture with Japanese Zen-Noh Grain.

GrainCorp announced to invest CAD$30m over the next three years to support the start-up phase of the joint venture, which is incorporated in Canada.

With a global value chain that includes 428 crop procurement locations and 280 ingredient manufacturing facilities, AMD employs over 32,300 people to serve customers in more than 160 countries.


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