Archer Daniels Midland Company
) recently announced that it had received the nod from South
Korea's The Korea Fair Trade Commission for the proposed
acquisition of Australia's leading agribusiness company,
GrainCorp Limited. With this, the company now has clearance from
seven 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
regulatory agencies in the U.S., Australia, South Africa, Canada,
Japan and South Korea, along with the European Commission.
Moreover, the company is in negotiation with the government
agencies of China and some other regulators in Australia for the
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 to
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.
In a separate announcement, Archer Daniels declared a cash
dividend of 19 cents per share to be paid on Sep 12, 2013 to
shareholders of record on Aug 22, 2013. The new payout marks the
successive quarterly dividend. Moreover, Archer Daniels boasts an
81-year record of regular dividend payment.
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 (Hold). The
company's major competitors include Cargill Inc.,
Tyson Foods Inc.
ARCHER DANIELS (ADM): Free Stock Analysis
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