August 25, 2010

AWB board recommends merger with Agrium

The board of Australian wheat exporter AWB is pushing for the agribusiness to become fully foreign owned by supporting a full takeover bid by Canadian fertiliser giant Agrium.

This means AWB's previous merger recommendation, to join with by eastern states grain handler GrainCorp, has been terminated.

AWB's managing director Gordon Davis said the Agrium offer is far superior, although it may mean some job losses

"Agrium's main focus is on using the people we have in the country to grow their business in Asia and globally," he added.

"Its extensive experience in crop inputs and range of products, and commitment to the grain handling business, can only help to better serve our customers," said AWB chairman Peter Polson.

The Agrium agreement allows AWB, the former monopoly wheat exporter, to pay a dividend of up to 20 cents a share, fully franked, subject to Tax Office approval.

Subject to Supreme Court orders, AWB shareholders should be sent documentation about the Agrium offer in late September or early October, and will vote on the offer a month later.

GrainCorp's David Ginns has confirmed proposed merger with AWB is off.

"We understand and we recognise that there is a need for the AWB board of directors to act in the best interest of their shareholders and clearly the decision they have made is in their judgement in the best interest of their shareholders," he said.