ADM sells ownership stake in GrainCorp

Global agricultural processor and food ingredient provider Archer Daniels Midland (ADM) has entered an underwriting agreement to sell its 19.9% stake in Australia-based GrainCorp (GNC) for a total value of A$387m (287$m).

According to the underwriting agreement, ADM has sold its stake in the issued capital in GrainCorp at a price of $8.53 a share. The transaction was executed by way of an underwritten sale to an underwriter.

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.

“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.”

Last month, ADM reopened its oilseed processing facility in Chornomorsk (formerly Illichivsk), Ukraine, after completing a major expansion and improvement project that almost doubles the plant’s sunflower seed processing capacity and adds switch capacity that allows the plant to crush rapeseed.

ADM EU Softseed Crush general manager Anton Povkhan said: “This expansion enables us to continue to efficiently grow our operations in Eastern Europe and meet the needs of our food and feed customers in the region.

"In addition, by adding switch capacity to the facility, we now have more flexibility to quickly and effectively respond to shifts in the marketplace.”