Archer Daniels Midland has revealed a raft of commitments, including infrastructure investment, in a bid to secure approval for its proposed acquisition of Australian firm GrainCorp.
The US agri-giant had an offer accepted in May, bringing an end to months of wrangling between the two firms. Graincorp had previously turned down the offer after saying it under-valued the company.
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The deal, however, has received opposition, with a group of Australian MPs last week joining forces to oppose the takeover.
In an announcement yesterday (26 November), ADM has committed to a A$200m investment to strengthen Australian agricultural infrastructure, with specific emphasis on rail enhancement projects.
In addition, the group said it will put price caps on grain handling charges at silos and ports, and has promised an “open access” system for port services. It will also establish a grower and community consultation board in the three eastern seaboard states where GrainCorp is understood to have a near-monopoly on the industry.
“Throughout our effort to secure approvals for our proposed acquisition of GrainCorp, we have worked constructively to create value for grain growers and the Australian economy as well as shareholders of GrainCorp and ADM,” said Ian Pinner, president of the business’s ADM Grain division. “We have had substantive discussions with growers, policymakers and other stakeholders, and we’ve been committed to finding common ground and developing solutions that address issues and opportunities that have been raised.
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By GlobalData“The additional capital investment that ADM will bring to GrainCorp represents a 100% increase in GrainCorp’s original A$250m capital expenditure budget prior to ADM’s proposal. Taken together, the capital investments ADM has committed to support or make for the GrainCorp business total A$500m.”
Australia’s Foreign Investment Review Board is due to decide by 17 December whether to approve the deal, impose conditions on it or reject it altogether.
