Sumitomo Corp said it will purchase Emerald Agribusiness Group Pty, allowing it to have full control of the storage facilities of the Australian firm in its bid to grow its worldwide grain business, Bloomberg reported. The acquisition will also give the Japanese firm control of Emerald's export terminal located in the State of Victoria.
Citing a statement, the report said that from 50%, Sumitomo took its stake in the parent firm of Emerald to 100%. The fourth largest trading company in Japan, Sumitomo did not disclose the deal's total value, the report said.
The deal is the newest sign of interest given by overseas investors in Australia's agricultural assets as the demand for food rises with growing incomes and population. Last year, Australia stopped the takeover of GrainCorp Ltd, the largest grain handler in eastern Australia, by Archer-Daniels-Midland Co. The brush off came after the country had approved Saputo Inc's acquisition of the oldest dairy processor in the country. Australia is the world's fourth biggest wheat exporter and third largest shipper of sugar and beef, the report said.
Emerald also said that they have received advice from the Foreign Investment Review Board and the Australian Competition and Consumer Commission that they will not be scrutinizing the purchase by Sumitomo anymore, Bloomberg reported.
Emerald Grain Pty Chairman Alan Winney said in another statement about the deal, "As a 100 percent subsidiary of Sumitomo Corporation the company will be able to fund future growth and expansion and compete more effectively in an Australian and Asian grain market that is now heavily influenced by global companies,"
After the sale is completed, Winney will be stepping down from his role together Mike Chaseling and Mick Cattanach, the two other founding directors of the firm. However, Chief Executive Officer John Murray who was appointed to the role in July last year will still be leading the company, the statement said.
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