Archer Daniels Makes $2.77 Billion Bid for GrainCorp

Oct 22, 2012

ADM Woos Australian Rival GrainCorp With Exclusive Bid

By , Farms.com

Illinois-based agriculture giant Archer Daniels Midland (ADM) has put a $2.76 billion cash bid on the table to purchase Australian rival GrainCorp. The offer was made public in a news release on Monday, where GrainCrop disclosed that ADM offered $11.75 a share, a 33 percent premium to its Friday traded share price.  GrainCrop is in the midst of reviewing the proposal, but hasn’t disclosed its decision on the offer. 

The offer has conditions attached, including exclusivity, due diligence and a recommendation to GrainCrop’s board to favor its bid. The bid signals ADM’s plan to expand its global presence outside of the U.S. The move isn’t ADM’s first attempt to grow its business. Less than a year ago, ADM pulled out of the race to buy Viterra, which was eventually bought up by Glencore for CAD$2.2 billion.

GrainCorp was founded in 1916 and in its infancy was part of the New South Wales state government’s Department of Agriculture. The company evolved and became privatized in the 1980s and acquired other Australian grain handlers including Vic Grain, Grainco and Hunter Grain. Australia is currently ranked the second-largest wheat exporter in the world.

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