Archer Daniels Midland Company announced that it has completed due diligence on GrainCorp Limited and intends to make a cash offer to acquire the outstanding common shares of the company for A$12.20 (US$12.42) per share under the terms of the takeover bid implementation deed signed with GrainCorp the week of April 21.
“We believe the offer delivers strong value for both companies’ shareholders,” said ADM chairman and CEO Patricia Woertz. “The acquisition fits well with our growth strategy and will meet our return objectives. We are also confident in the cultural fit of our two companies: we share similar values of integrity, excellence and safety, with strong commitments to people, communities, customers and sustainability."
The offer implies an aggregate transaction value of about A$3.4 billion (US$3.46 billion). The transaction value reflects the weighted average cost of acquiring the initial 19.8 percent stake in GrainCorp at an average of A$11.24 (US$11.45) per share, and the remaining shares of GrainCorp at A$12.20 per share. The transaction meets ADM’s key financial objectives, and will be earnings accretive in the first full year. ADM will fund the acquisition through a combination of operating cash flows and debt.
GrainCorp has indicated that the ADM offer would be unanimously recommended by the GrainCorp board, subject to there being no superior proposal, an independent expert confirming that the offer is fair and reasonable, and the regulatory conditions for the acquisition being satisfied or waived by Dec. 31, 2013.
