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and animal feed industries.
on June 22, 2009

Viterra, ABB agree to combine operations

Viterra has operations and distribution capabilities across Western Canada and beyond.

Canadian-based Viterra has signed an implementation agreement to combine its operation with Australian-based ABB Grain Ltd. Under the terms, Viterra would acquire all the issued and outstanding shares of ABB for $1.4 billion. The offer is supported by both Boards of Directors and is comprised of a combination of cash and shares, including a special dividend to be paid by ABB.

Viterra CEO and President Mayo Smith said of the deal, “With demand for core commodities forecast to increase by 20% over the next 10 years, dual origination from Australia and Canada is a significant competitive advantage in serving this growing demand. We are creating a global leader and supplier of key food ingredients and food production to the world. The combined company will be financially stronger and better able to access capital to meet the growing demands of the international marketplace.”

Viterra’s livestock, feed and services segment generated feed sales of $173.6 million for the three months ended April 30, 2009, which compares to $123.8 million in the comparable period of 2008, the company reported June 10. The increase in primarily due to the contributions from feed manufacturing plants that Viterra acquired during fiscal 2008. Segment earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter was $4.6 million, compared to an EBITDA loss of $3.1 million for the same period of the prior year. For the six months ended April 30, 2009, EBITDA was $13.8 million, compared to $2.3 million for this segment last year.

Based on Viterra’s projections, fiscal 2009 industry receipts are estimated to be between 34 and 35 metric tons, the highest level experienced in the past 10 years and well above the 31 million to 33 million metric ton average. The company anticipates strong demand and deliveries for the remainder of the fiscal year. Farm incomes were up approximately 63% from 2007 and grain prices have been relatively strong. Both factors have been strong for the agri-products segment and are reflected in continued strong demand for crop inputs this spring.

Viterra has extensive operations and distribution capabilities across Western Canada, and with operations in the United States, Japan, Singapore and Geneva. The company is diversified into sales and services of crop inputs and equipment, grain handling and marketing, livestock feed and services, agri-food processing and financial products.

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