The Archer Daniels Midland Company has bid $2.76 billion for an Australian rival, GrainCorp, as the agricultural giant seeks to bulk up its global operations.
GrainCorp, which disclosed the offer in a press release on Monday in Australia, said that Archer Daniels had offered 11.75 Australian dollars a share. That's a 33 percent premium to the company's Friday closing price.
Last week, Archer Daniels said that it had expanded its stake in GrainCorp to 14.9 percent from 4.9 percent. (The move was done through equity derivatives.)
Archer Daniels added that it wanted to hold talks about buying the Australian company in an all-cash offer. The move, according to the American food processor and commodities trader, was prompted by its a plan to expand its agricultural process and oilseeds businesses internationally.
“GrainCorp is a well-managed company, and together with ADM would be better positioned to connect Australia's farmers with growing global dem and for crops and food, particularly in Asia and the Middle East,†Patricia Woertz, Archer Daniels' chairman and chief executive, said in a statement at the time.
GrainCorp said that it is reviewing the proposal but hasn't yet come to a decision about the offer. It is being advised by Credit Suisse, Greenhill & Company and the law firm Gilbert & Tobin.
