12 July 2013 19:29 [Source: ICIS news]
HOUSTON (ICIS)--Archer Daniels Midland (ADM) has received approval of the Competition Commission of South Africa for the proposed $3.3bn (€2.6bn) acquisition of Australian agriculture company GrainCorp, ADM officials confirmed on Friday.
With the South African agreement, ADM now has received approval from four governmental agencies including Canada, Australia and the US Federal Trade Commission. Currently ADM is awaiting clearance from regulators in China, the European Union, Japan, South Korea and Australia.
In June, the proposed takeover was cleared by the Australian Competition and Consumer Commission, but a spokesperson with ADM said the acquisition still needs the approval of the Foreign Investment Review Board.
ADM said it does not know when the remaining regulators will make their decision, what they may be or if a denial by any country would hinder their the company's attempts to acquire GrainCorp.
Presently, ADM owns 19.8% of GrainCorp shares and in 2012, attempted to acquire the company but was rejected. In early May, an increase bid was approved and recommended to GrainCorp’s board of directors.
There have been concerns that the acquisition of GrainCorp would cause issues in terms of infrastructure and access to commodity facilities, but ADM’s position has been that the merger will benefit Australian growers and increase access to global markets.
Australia exports approximately 70% of its farm products, but since 2008, nearly all the export infrastructure is controlled by foreign entities, and analysts have pointed out that it is in critical need of investment in order to meet future trade challenges.
ADM has said access would not be an issue for the company. If approved, the acquisition would give the company control of seven eastern ports, which take in 90% of the region’s grain exports.
($1 = 0.76)
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