Archer Daniels Midland Company
) yesterday got the nod from The Japan Fair Trade Commission for
its proposed acquisition of Australia's leading agribusiness
company, GrainCorp Limited. With this, the company now has
clearance from five government agencies for the acquisition.
After gaining The United States Federal Trade Commission's
approval in Nov 2012, Archer Daniels had sealed the deal in late
Apr 2013. Since then, the company has been seeking fair trade
clearance from the government agencies of different
At present, Archer Daniels has the acquisition sanction from
five countries including the U.S., Australia, South Africa,
Canada and Japan. Moreover, the company is in negotiations with
the government agencies of China, the European Union (EU) and
South Korea for the final clearance.
Archer Daniels has agreed to pay A$12.20 per share for all
outstanding shares of GrainCorp which totals approximately A$3.4
billion. The American agribusiness giant already holds 19.8%
stake in the Australian agri-products dealer, acquired for an
average of A$11.24 per share.
Archer Daniels had made an initial bid of A$11.75 per share in
Oct 2012 and later raised it by 3.8% to A$12.20 per share in Dec
2012. At the time of the initial offering in October, Archer
Daniels had about 14.9% interest in the Australian farm products
Archer Daniels' interest in acquiring GrainCorp is consistent
with its ongoing portfolio management initiative. The company's
strategy focuses on expanding its Agricultural Services and
Oilseeds businesses across the globe by investing in key supply
areas beyond national borders.
Apart from increasing the company's global footprint, the
aforementioned buyout will expectedly help Archer Daniels
consolidate its financial position.
Moreover, Archer Daniel's union with GrainCorp will likely
facilitate the former to broaden its scope, by channeling
Australia's farm produce to meet the growing demand for crops and
food in the global market, especially in Asia and the Middle
Currently, Australia's agricultural business has ample
opportunity for agri-based companies that are seeking to expand.
Australia is a major exporter of many commodities, ranging from
minerals such as iron ore to agricultural goods like wheat.
Archer Daniels procures, transports, stores, processes, and
merchandises agricultural commodities and products in the United
States and abroad. The company has three major business segments:
Oilseeds Processing, Corn Processing, and Agricultural
Archer Daniels currently carries a Zacks Rank #3. The
company's prime competitors include Cargill Inc.,
Tyson Foods Inc.
ARCHER DANIELS (ADM): Free Stock Analysis
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