The world's largest corn processor, Archer-Daniels-Midland Co finalized an agreement from GrainCorp Ltd for the purchase of the rest of the Australian crop handler's business and assets. The winning bid was worth Aus$2.2 billion or US$2.3 billion with a Aus$229 million dividend included.
The share values of GrainCorp rose by 7.9% as ADM agreed to pay for Aus$12.20 per share subject to regular due diligence checks to be conducted. Aside from the share price, GrainCorp shareholders would be receiving Aus$1 per share in dividends according to the Sydney based company's statement.
With the purchase of GrainCorp, ADM would gain control of the seven of eight shipping ports that carry deliveries of grains in bulk. It would also have access to Australia's east cost together with becoming a major malt producing company Down Under. Last year, a bid was made by ADM through its shareholdings currently pegged at 19.85%.
GrainCorp's share prices closed at Aus$12.81, its highest levels since the company was publicly listed back in March 1998, with ADM gaining 2.4% in trading yesterday.
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