GrainCorp to buy AWB to become Australia’s largest wheat exporter
31 Jul 2010
Australia's GrainCorp agreed to buy smaller rival AWB for A$855 million ($770 million) to become the country's biggest wheat exporter.
The merger would create a combined Australian group with a market capitalisation of more than A$2 billion and the largest diversified agribusiness with annual sales of over A$7 billion, enabling it to take on rivals like Bunge Ltd, Glencore, Viterra Inc and Cargill in exporting wheat to Asia, North Africa and the Middle East.
Under the deal that was announced late Friday, Sydney-based GrainCorp will issue one of its own share for every 5.75 AWB shares, a premium of 9 per cent to 28 July closing price, valuing each share at A$1.047 and the deal at A$855 million.
GrainCorp shareholders would hold 58 per cent of the merged company and AWB 42 per cent.
Post merger the headquarters of the combined company will be located at Sydney with 11 directors, six from GrainCorp and four from AWB plus the managing director, Alison Watkins.
AWB chairman Peter Polson will become the chairman of the merged company, with GrainCorp chairman Don Taylor to be the vice chairman and the current CEO of GrainCorp Alison Watkins will be the managing director and chief executive.
