Archer Daniels Midland Company (NYSE: ADM) today announced a package of additional commitments related to its proposed acquisition of GrainCorp Limited (ASX: GNC). Key elements of that package are:
- An additional A$200 million investment to strengthen Australian agricultural infrastructure, with specific emphasis on rail enhancement projects;
- Price caps on grain handling charges at silos and ports;
- Commitment to grain infrastructure access for growers and third parties;
- Commitment to “open access” regime for port services;
- A grower and community advisory board with representation from New South Wales, Victoria and Queensland, as well as regular public grower consultation; and
- Support for expanded grain stocks information arrangements.
“Throughout our effort to secure approvals for our proposed acquisition of GrainCorp, we have worked constructively to create value for grain growers and the Australian economy as well as shareholders of GrainCorp and ADM,” said Ian Pinner, president, ADM Grain. “We have had substantive discussions with growers, policymakers and other stakeholders, and we’ve been committed to finding common ground and developing solutions that address issues and opportunities that have been raised.
“Taking into account the feedback we received, we are committing to a further package of investments and initiatives to help ensure that Australian agriculture is able to serve a key role in meeting growing global demand.
“These commitments are in addition to the existing capital expenditure and other commitments we have set out in our Bidder’s Statement, which included a A$50 million enhancement to GrainCorp’s planned capital expenditure over the next few years. The additional capital investment that ADM will bring to GrainCorp represents a 100 percent increase in GrainCorp’s original A$250 million capital expenditure budget prior to ADM’s proposal. Taken together, the capital investments ADM has committed to support or make for the GrainCorp business total A$500 million.”