Viterra in bid to buy Australian grain company, ABB

29 April 2009

Canadian agribusiness Viterra in has offered $1.6 billion in a conditional non-binding offer to buy all its shares of Adelaide grain company ABB (former Australian Barley Board) at between $9 and $9.50 each with a mix of cash, Viterra shares and franked dividends.

ABB said the proposal was subject to conditions.

The number of Australian grain bodies has reduced from 21 to four, leaving ABB little room to move in an industry under increasing consolidation pressures.

ABB chief executive Michael Ivaniw earlier this year expressed an interest in consolidating, to deliver shareholder value. He had proposed Western Australia's CBH as the prospective partner for a merger but said structural changes in direction would be needed and the way CBH's board wanted to go forward would need to be considered.

CBH being a grower-owned co-operative a merger would be unlikely as long as it continued to remain a co-operative.

ABB annual net profit was $48.8 million on 30 September last year and expects an underlying net profit of $63-$73 million this year.