Australia Rejects ADM’s $3.4 Billion Bid to Acquire GrainCorp

29 Nov 2013 --- Australia has rejected the $3.4 billion takeover of GrainCorp by U.S. agribusiness giant Archer Daniels Midland (ADM) on Friday, bowing to pressure from grain growers in a rare and surprising decision. Announcing the decision this morning to reject ADM's $3.4 billion bid for the eastern grain handler, Federal Treasurer Joe Hockey said he had to take into account the national interest.

"I consider that now is not the right time for a 100 per cent foreign acquisition of this key Australian business," he said, adding that the industry was "going through transition and now is not the right time to have all the major players foreign owned".

"A further significant consideration was that this proposal has attracted a high level of concern from stakeholders and the broader community," he said.

"I therefore judge that allowing it to proceed could risk undermining public support for the foreign investment regime and ongoing foreign investment more generally. This would not be in our national interest."

“We are disappointed by this decision. We are confident that our acquisition of GrainCorp would have created value for shareholders of ADM and GrainCorp, as well as grain growers and the Australian economy,” said ADM Chairman and CEO Patricia Woertz.

“Throughout this process, we worked constructively to create an arrangement that would be in Australia’s best interests and made substantial commitments to address issues that were important to stakeholders,” she said. Woertz confirmed there were no conditions or undertakings requested of ADM by the Treasurer.

Concerning ADM’s plans for its current investment in GrainCorp, Woertz said, “As owner of 19.85 percent of GrainCorp, we will look to work with them to maximize returns on our investment and create value for both companies.”

Woertz also commented on ADM’s business planning in light of this development. “We are reviewing our capital allocations, including shareholder distribution alternatives, as part of our 2014 business plan process currently underway. We have an attractive pipeline of opportunities that are consistent with our focus on value creation and fit our strategy for profitable growth.”