ABB Grain-Viterra combine likely to boost Australian grain industry

21 May 2009

Canadian agribusiness group Viterra Inc's proposed takeover of ABB Grain Ltd offers great advantages to the Australian grain industry, ABB managing director Michael Iwaniw said yesterday.

Both the companies entered into an implementation agreement on Tuesday under which Viterra proposes to acquire all the issued and outstanding shares in ABB.

The amalgamation would create one of the world's largest exporters of wheat, canola and barley, with 35-per cent market share.

The transaction, valued at approximately A$1.6 billion (C$1.4 billion), comprises a combination of cash and shares. The bid values ABB shares at $9.11 to $9.41, including a special dividend of 41 to be paid by ABB.

The combined company would be considerably stronger and the new structure would help to drought-proof ABB and provide significant benefits for farmers and employees, Iwaniw said.

More than 21,000 farmer shareholders would reap the benefits of their investment in ABB if the takeover succeeds. It follows extraordinarily successful performances in the decade since the Australian Barley Board was corporatised in 1999 when 35 million shares with a nominal value of $1 were created.