This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
(AP) - The Australian government has rejected Archer Daniels Midland Co.'s bid to acquire grain handler GrainCorp Ltd, saying the proposed buyout would be contrary to the national interest.
ADM, which owns a nearly 20 percent stake in GrainCorp, offered to buy the remaining 80 percent interest in the company last year. A sweetened offer in May amounted to 12.20 Australian dollars ($12.63) a share in cash, giving all of GrainCorp a value of 3.4 billion Australian dollars.
In a statement, Australian Treasurer Joe Hockey concluded that it isn't the right time for a foreign company to acquire full ownership of an Australian grain business. He noted that ADM's proposed buyout has stirred concerns among growers in Australia that such a deal could reduce competition and impede their access to grain storage and distribution.
Hockey added that he was inclined to approve any proposal by ADM to boost its share of GrainCorp as high as 24.9 percent.
"This would also provide a platform for ADM to build stakeholder support for potentially greater participation in the Australian industry as it develops," Hockey wrote.
ADM management expressed disappointment in the decision.
"We are confident that our acquisition of GrainCorp would have created value for shareholders of ADM and GrainCorp, as well as grain growers and the Australian economy," ADM Chairman and CEO Patricia Woertz said in a statement Thursday.
She added that Hockey requested "no conditions or undertakings" from ADM.
Given the rejection of its bid for GrainCorp, Woertz said ADM is reviewing its capital allocations, including shareholder distribution alternatives.
The Decatur, Ill., company currently pays a quarterly dividend of 19 cents per share.
ADM has been looking to invest in overseas suppliers and Australia is a major exporter of commodities, including iron ore and wheat. It has said that full ownership of GrainCorp would help expand its agriculture offerings in the Middle East, Africa and Asia.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)