NEW YORK (The Deal) -- Archer Daniels Midland (ADM) faces a nervous wait to discover if its A$3.4 billion ($3.24 billion) deal for Australia's GrainCorp will win Treasury approval next month, as government infighting over the acquisition this week spilled out into the public domain.
The fault lines were laid bare Wednesday, Nov. 6, when Australia's Treasurer Joe Hockey told a press conference that he will "not be bullied or intimidated by anyone" as he ponders whether to approve the deal. A decision is due by Dec. 17.
Hockey, who is part of the pro-market Liberal Party, did not name his tormentors but his comments come days after Deputy Prime Minister Warren Truss said that selling GrainCorp would undermine Australia's food security and its future as a major agricultural centre. Truss is the leader of the Australian National Party, the coalition's junior partner. The party draws the bulk of its support from Australia's farming communities.
"If we don't own any of the supply chain, it will be very difficult for us to ever make decisions which can influence whether or not our grain industry is to prosper," Truss told state-owned Australian Broadcasting Corporation, or ABC. "If we lose our biggest agribusiness from our stock exchange...it opens questions about whether Australia is really going to be an international center for commerce, for agriculture and for industry in the future."
Under Australia's foreign takeover rules the Treasurer has the final say on Archer Daniels Midland's bid for GrainCorp, which is the largest grain handler on Australia's east coast. The sale of GrainCorp would place substantially all of Australia's grain export infrastructure under foreign ownership and leave about 60% of all grain exports under the control of three companies - Archer Daniels Midland and Cargill Inc., of the U.S., and Switzerland-based Glencore Xstrata.