ADM makes $2.78bn bid to acquire GrainCorp

US-based agri-processing company Archer Daniels Midland (ADM) has made an A$2.7bn ($2.78bn) offer to acquire Australian grain handler GrainCorp.

In response, GrainCorp said that it was assessing ADM’s A$11.75 ($12.13) per share offer, which is subject to a number of conditions including due diligence, exclusivity and clearance by the ADM board.

The company, which is involved in the trading of wheat, barley, canola and malt, noted that it has not yet made a decision on the bid and plans to keep the market informed of any material developments.

The acquisition would enable ADM to increase sales in Asia, the second-biggest market for GrainCorp’s products and services.

Meanwhile, on 18 October 2012, ADM acquired a 10% stake in GrainCorp at a price of A$11.75 ($12.13) per share, boosting its overall share to 14.9%.

ADM chairman and CEO Patricia Woertz had commented at the time that the company’s investment in GrainCorp is part of its strategy to strengthen its agricultural services and oilseeds businesses by investing in key supply regions outside the US.

"GrainCorp is a well-managed company, and together with ADM would be better positioned to connect Australia’s farmers with growing global demand for crops and food, particularly in Asia and the Middle East," Woertz added.

ADM’s bid to acquire GrainCorp comes after the Australian Wheat Board, a wheat-marketing monopoly operated by the government, broke up in 2010.

GrainCorp, based in Sydney, Australia, is involved in receival, testing, transport, handling and storage of grain and other bulk commodities, as well as export of wheat, barley and oilseeds, and has a presence in North America, Europe, Australia, Africa, Asia, and South America.