Tags: US | Agrium | AWB | Bid

Agrium Bids $1.09 Billion for Aussie Grain Producer AWB

Monday, 16 Aug 2010 09:41 AM

Fertilizer company Agrium offered more than $1 billion for Australian grain producer AWB, its second major buyout attempt in as many years.

The offer, announced late Sunday for $1.34 per share, is an attempt to swipe AWB from rival GrainCorp. Ltd., which has already made a bid for the company.

Agrium lost its hostile takeover attempt of CF Industries. It officially dropped its $5.5 billion bid in March.

CF acquired Terra Industries for $4.7 billion the following month, creating one of the world's largest fertilizer companies and putting to end a year of maneuvering between the two companies.

Large agribusinesses are aggressively attempting to build scale so that they can compete with industry giants like Cargill, which has operations in about 70 countries.

Agrium Inc. said the per-share price is a 57 percent premium to AWB's trading price on July 29, before AWB Ltd. agreed to a tie-up with GrainCorp.

The deal, worth $1.23 billion in Australian dollars, or $1.50 per share, would require the unanimous support of AWB's board.

Agrium, one of the largest fertilizer makers in North America, is based in Calgary, Alberta.

And AWB may prove to be an even bigger prize for any company seeking to expand in the East.

Russian drought has raised demand for Australian grain this year. Fires and drought also have cost Russia one-third of its wheat crop, prompting the government to ban wheat exports through the end of the year in a move that has sent world grain prices to new highs.

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Fertilizer company Agrium offered more than $1 billion for Australian grain producer AWB, its second major buyout attempt in as many years.The offer, announced late Sunday for $1.34 per share, is an attempt to swipe AWB from rival GrainCorp. Ltd., which has already made a...
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2010-41-16
 

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