December 3, 2023

DealBook: A.D.M. in $3.1 Billion Australian Takeover

GrainCorp's chairman, Don Taylor, at the company's 2012 annual meeting.Daniel Munoz/ReutersGrainCorp’s chairman, Don Taylor, at the company’s 2012 annual meeting.

HONG KONG — The board of GrainCorp, one of the biggest Australian grain processors, accepted a sweetened takeover bid worth 3 billion Australian dollars ($3.1 billion) Friday from the American agribusiness giant Archer Daniels Midland.

A.D.M., based in Decatur, Ill., was successful after two of its previous offers had been rejected by GrainCorp’s board as having materially undervalued the company. By its own estimates, GrainCorp handles 75 percent of eastern Australia’s annual grain production and 90 percent of that region’s bulk grain exports.

The acquisition will help the American company expand its international footprint and tap rising demand from growing and increasingly wealthy countries in Asia, including China, a top export market for Australian agricultural products.

A.D.M., which had already acquired 14.9 percent of the Australian company, previously made a cash offer worth 11.75 Australian dollars per GrainCorp share in October. A follow-up bid of 12.20 dollars a share was rejected by GrainCorp in December. A.D.M. has since raised its stake in the firm to 19.8 percent.

A.D.M. finally won over GrainCorp’s board with a bid of 12.20 dollars in cash for each share not already owned, plus an additional cash dividend payout of 1 dollar a share. The total transaction values GrainCorp at 3.4 billion dollars, including debt, A.D.M. said.

“The addition of GrainCorp to our global network would fit our strategy and help to further connect Australia’s growers with growing global demand for crops and food, particularly in Asia and the Middle East,” A.D.M.’s chief executive, Patricia Woertz, said in a statement.

Shares in GrainCorp closed 7.9 percent higher at 12.81 dollars in Sydney on Friday.

Under the terms of the deal, GrainCorp is to open its books to A.D.M. over the next week. A.D.M. has until May 2 next Thursday to confirm its offer. The deal would then be put to shareholders, requiring majority approval to proceed.

The takeover is also subject to regulatory approvals from Australia’s Foreign Investment Review Board and China’s Ministry of Commerce, which enforces the nation’s antimonopoly law.

Credit Suisse and Greenhill are the financial advisers to GrainCorp.

This post has been revised to reflect the following correction:

Correction: April 26, 2013

An earlier version of this article gave the incorrect figure for the valuation of GrainCorp implied by the A.D.M. offer. It is 3 billion Australian dollars, not 2.6 billion dollars.

Article source:

DealBook: Marubeni of Japan to Buy Gavilon for $3.6 Billion

The Gavilon Grain dock at the Port of Duluth-Superior in Superior, Wis., in January.Ariana Lindquist/Bloomberg NewsThe Gavilon Grain dock at the Port of Duluth-Superior in Superior, Wis., in January.

TOKYO — Marubeni, the Japanese trading house, said on Tuesday that it would buy the American grain merchant Gavilon Group for $3.6 billion, as it looks to ship American agricultural products to fast-growing Asian markets.

Buoyed by a strong yen, Japanese companies have been spending billions of dollars in recent years to secure access to resources like minerals and natural gas, activity that has helped fuel a global commodities boom.

The Gavilon acquisition would allow Marubeni to become a top global player in grains, handling over 55 million tons annually, according to a statement from the Japanese company. The deal for Gavilon would also give Tokyo-based Marubeni far greater control of supply and distribution in the United States, the world’s largest agricultural exporter.

“As part of a larger trading organization, Gavilon will be well-positioned to more efficiently connect supply with growing global demand,” Greg Heckman, president and chief executive of Gavilon, said in a statement.

Gavilon, based in Omaha, Neb., is the third-biggest grain distributor and trader in the United States, behind Archer Daniels Midland and Cargill. The company has been expanding its global presence, acquiring the DeBruce Companies in 2011 to bolster assets in the United States and Mexico. In a separate statement, Orascom Construction Industries of Egypt said it was selling its 16.8 percent stake in Gavilon to Marubeni for $605 million.

With Gavilon, Marubeni gains critical exposure to American agriculture market, securing supplies for its home market.

Japan is the largest grain importer in the world, relying on imports for 60 percent of its food in terms of calories.

Marubeni also hopes to position itself to supply growing demand in Asia, especially in China. As it continues to industrialize, China also faces shrinking farmland and other production constraints.

“We expect world grain trade volume to continue to grow on the back of robust demand in China and other emerging countries,” Marubeni said in a statement.

Article source: