OMAHA — Gavilon L.L.C. has signed a non-binding memorandum of understanding with AWB Ltd. under which Gavilon would acquire AWB Geneva and form a 50-50 joint venture of the AWB Australian Commodity Management business. Financial terms of the transaction, which is expected to be completed by June, were not disclosed.
Greg Heckman, president and chief executive officer of Gavilon, said the proposed joint venture will provide an opportunity for Gavilon to expand its global footprint in a meaningful way with a well-established Australian agribusiness. Gavilon operates the fifth largest grain merchandising operation in the United States.
“The proposed purchase of AWB Geneva along with the joint venture in Australia will strengthen our destination marketing capability and expand our grain origination network to include Australia,” Mr. Heckman said. “We are pleased to be partnering with AWB and look forward to making further investments in infrastructure to enhance and complement this business.”
AWB Geneva markets oilseeds and vegetable oils into Eastern Europe and the Middle East and also trades European-origin grains such as wheat, barley and corn.
Gordon Davis, managing director for AWB, said the transaction price will be formulated on the basis of book value plus a premium and is expected to release significant capital for AWB.
“By partnering with a significant global commodities company in Gavilon, the proposed transaction will improve the value proposition to Australian producers and our domestic and international customers as well as enhance the competitive position of AWB’s Commodities Management activity,” Mr. Davis said.