September 2, 2003
Australia's Wheat Exporter, AWB Limited, to Buy Wesfarmers Landmark
Australia's monopoly wheat exporter has defended the $825 million it paid to purchase the pastoral arm of Wesfarmers Landmark.
The acquisition will make AWB Limited Australia's biggest agribusiness by extending its presence through Landmark's 300 outlets, 1,900 staff and access to 100,000 customers.
AWB managing director Andrew Lindberg says the deal gives AWB Limited more opportunities to sell its grain marketing services including the lucrative harvest finance loan scheme which is the biggest earner for the company.
But analysts are already claiming the price tag of $825 million is far too much, which Mr
"We think we've paid a sensible strategic premium but we're very comfortable that we've paid a realistic price and we'll be able to do in the group now, things that really no one else in rural Australia will be able to do," he said.
"Unparalleled access to the market and unparalleled access to the farmer across of a whole range of agriculture inputs and products and that uniquely positions us."
Managing director of Wesfarmers Michael Chaney says the sale of Wesfarmers Landmark to AWB Limited was not the easiest of decisions because the company has been in the rural agency business for nearly 90 years.
But he says the deal was too good to refuse.
"The offer that AWB put to us in the end was a very good one and we felt was in the interest of our shareholders and we also thought it was very much in the interest of the employees and the customers," he said.
The purchase has attracted the attention of Australia's competition watchdog.
A spokeswoman for the Australian Competition and Consumer Commission says it only received the submission from AWB Limited to buy Wesfarmers Landmark late on Friday afternoon and they are still looking into it.