ADM sells stake in GrainCorp
December 09, 2016
US agribusiness commodities trader Archer Daniels Midland (ADM) has sold its 19.9% stake in GrainCorp Ltd for about A$387M (US$286M) three years after a failed bid to wholly acquire the Australian grain handler, Reuters reported on 1 December.
The deal had been carried out via an underwritten sale to Swiss underwriters UBS, the Reuters report said.
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.”
In November 2013, the Australian government rejected ADM’s proposed acquisition of GrainCorp for A$3.4bn (US$3.1bn), saying that the deal would go against national interests.
The Sydney-based firm 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, Food Business Review said. Its seven storage and loading facilities controlled 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, Food Business Review said.
GrainCorp said it would invest CAD$30M (US$22.5M) over the next three years to support the start-up phase of the joint venture.