May 25, 2009
Viterra-ABB merger may spark Australian grain market consolidation
If Viterra's takeover bid for Australia's ABB grain succeeds, it may become a catalyst for consolidation in the Australian agricultural industry.
Mayo Schmidt, President and CEO of Viterra, said Australia has worked hard over the last couple of years to consolidate to form stronger companies, and Viterra and ABB can offer that.
The ABB board supports the takeover bid, but analysts have raised concerned about the value of the offer, which requires the approval from 75 percent of shareholders, nearly half of whom are farmers.
Schmidt did not rule out the closure of some ABB depots if the merger goes ahead. He said Viterra will look at its own facilities in Canada and identify what makes the best access for farmers and what allows operational efficiency.
If a facility is out of position and does not provide economic returns to the grower and the company, then the issue has to be addressed, he said.
