CALGARY, ALTA. — Viterra Inc. has reached agreement to acquire all the issued and outstanding shares in Adelaide, Australia-based ABB Grain Ltd. for a combination of cash and shares valued at approximately C$1.4 billion ($1.2 billion).
The transaction values ABB shares at A$9.11 to A$9.41, a premium of up to 9.4% from ABB’s last traded price. The transaction includes a special cash dividend of A$0.41 per share to be paid by ABB.
The transaction has been unanimously recommended by the ABB board of directors and unanimously approved by the board of directors of Viterra.
"Over a considerable period of time our respective companies have developed a solid understanding of each others operations, management philosophies and strategic goals," said Mayo Schmidt, president and chief executive officer of Viterra. "This relationship has culminated into a transformational combination that will drive significant value for all shareholders, destination customers and growers. We are creating a leading global food ingredients supplier at a time when markets are expanding. With assets in the key exporting geographies of Australia and Canada, the new company will have enhanced access to high growth markets and margin opportunities. We will be financially stronger and better able to access capital and manage risks required to succeed in the global marketplace."
Michael Iwaniw, managing director for ABB, said the transaction is consistent with the two companies’ strategy to expand global footprint through geographic diversification and investments in value-added processing.
According to the companies, the combined business will result in several benefits, including greater exposure to the higher growth Asian market, the largest export origination capability for core commodities, business and geographic diversification and increased scale.
The Australian, New Zealand and South East Asian operations of the new company will be based in Adelaide, which will be the worldwide headquarters of the company’s malt business.