Japan approves ADM’s $2.95bn acquisition of GrainCorp

The Japan Fair Trade Commission has approved US-based Archer Daniels Midland’s (ADM) proposed acquisition of Australian grain handler and processor GrainCorp for A$2.8bn ($2.95bn).

With this approval, five government agencies have now cleared the acquisition.

The deal was approved by South Africa’s Competition Commission and Canada’s Competition Bureau earlier this month; by the Australian Competition and Consumer Commission in June; and by the US Federal Trade Commission in November 2012.

ADM noted that it is working with regulators in Australia, China, the European Union, and South Korea to gain further clearances.

The acquisition of GrainCorp is part of ADM’s strategy to strengthen its agricultural services and oilseeds businesses by investing in key supply regions outside the US.

In April this year, ADM entered into an agreement to acquire GrainCorp for A$2.8bn ($2.95bn), paying A$12.20 ($12.60) per share in cash.

The offer is the third since ADM’s initial approach, when it acquired a 19.8% stake in GrainCorp to diversify away from reliance on the US.

In October 2012, ADM made an offer to pay A$11.75 ($12.13) per share; however, GrainCorp rejected the offer saying that the bid was too low.

In December, ADM raised its offer by 3.8% to A$12.20 ($12.85) per share but GrainCorp rejected it saying that the offer did not represent its portfolio of assets.

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

The company operates a network of 280 storage facilities and its seven storage and loading facilities control over 90% of bulk grain exports in eastern Australia.

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Image: ADM noted that it is working with regulators in Australia, China, the European Union, and South Korea to gain further clearances. Photo courtesy of Archer Daniels Midland Company.