November 29, 2013
Deputy Prime Minister and Member For Wide Bay Warren Truss has welcomed the decision by Treasurer Joe Hockey to reject the proposed takeover of GrainCorp by American company Archer Daniels Midland.
Mr Truss said the Federal Government supported foreign investment in Australian agriculture however “not all foreign takeovers are in the national interest”.
Critics of the $3.4 billion Archer Daniels Midland deal had claimed it would have given too much control of the Australian grains industry to a foreign company.
GrainCorp operates 280 grain storage facilities and seven of the 10 grain port terminals in eastern Australia.
The proposed takeover had been criticised by grower groups and caused a split in Coalition ranks with many National MPs opposed to the sale.
“The Australian grain industry must now get on with building a strong future for itself and growing its export markets across the globe,” Mr Truss said.
“I welcome the fact that Australia will continue to have a major locally owned company dedicated to furthering the interests of the Australian industry.”
Archer Daniels Midland had promised to spend $250 million upgrading local infrastructure if the deal went ahead.
GrainCorp shares dropped more than 25 per cent in early trading on the ASX today after the announcement and finished the day down about 22 per cent, at $8.72.
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GrainCorp Chairman Don Taylor said today it was extremely disappointing that the transaction would not be proceeding as planned.
“Today’s events will have enduring implications that will be felt not only by our shareholders but by the entire industry. Australian agriculture has been prevented from realising the potential benefits from the significant capital ADM would have invested in the long term future of the industry,” he said.
“The Board remains confident in GrainCorp’s ability to continue to implement our long-term strategy, underpinned by our program of strategic growth initiatives and strong market fundamentals.
“The GrainCorp Board and management have worked constructively and appropriately with ADM and other stakeholders throughout the process and ADM’s dealings with GrainCorp have been professional.
“GrainCorp has remained focused throughout the proposed takeover on the profitable operation of GrainCorp’s businesses and its strategic assets.”
ADM holds a 19.85 per cent interest in GrainCorp and, under the terms of the Takeover Bid Implementation Deed, must continue to hold this interest until at least December 31, 2013.
Under the terms of the ADM Offer, GrainCorp shareholders were entitled to certain dividends including a dividend of 25 cents paid in July, which they are entitled to retain.
Shareholders on the register on December 2 are also entitled to receive the final FY13 dividend of 20 cents. However, shareholders will not be entitled to receive the balance of the Permitted Dividends or Earnings Dividend.
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