September 8, 2008


AWB eyes industry consolidation as shareholders back constitutional change



AWB Ltd. (AWB.AU) Managing Director Gordon Davis Sunday (September 7) predicted the Australian agribusiness sector will consolidate in coming years, with the wheat exporter now free to compete equally in the recently deregulated wheat export market, after winning shareholder approval to scrap its complex dual share structure.


Davis told Australian Broadcasting Corporation's Inside Business programme it is difficult to say how many major grain players there will be in two or three years.


"Over time hopefully there'll be one or two very strong, well funded, well capitalized Australian agribusinesses with very strong links back to Australian growers," he said.


Asked whether AWB would be predator or prey in any takeovers, Davis said: "I think we'd hope that we can build the business performance, restore the market confidence such that we're fully priced and our market, the equity value, reflects the value of the company and that is ultimately your best defence."


AWB's A-class, or grower, shareholders last week agreed to end the dual-class shareholding structure. The structure was put in place prior to AWB's listing on the stock exchange in 2001 to ensure growers' interests were looked after during AWB's monopoly over wheat exports, which ended June 30. B-class, or economic shareholders, had agreed to the change Aug. 21. 

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