Archer Daniels Midland has sweetened its bid for Australian grain giant GrainCorp, saying the latest assurances address the issues raised by grain growers.
In a new incentive package for growers, ADM has committed an additional $200 million for infrastructure investments, with a “specific emphasis on rail enhancement projects”.
The package also includes a cap on grain handling charges at silos and ports, a commitment from ADM to maintain open access to ports and other grains infrastructure, as well as the company’s support for “expanded grain stocks information arrangements”.
ADM has also committed to twice-yearly forums with grower organisations.
The offering to GrainCorp shareholders remains unchanged.
The deal hinges on approval from shareholders and from the Treasurer Joe Hockey, who has until December 17 to announce whether he believes the sale is in the ‘national interest’, according to foreign investment rules.
Eastern states grain grower groups, the National Farmers’ Federation, the National Party and eastern states Liberal MPs from rural electorates are all opposed to the deal, which they say is not in the national interest.
They’ve expressed concerns about the effect on competition and pricing, as well as access to ports and other grain handling, transport and export infrastructure.
In a statement, ADM’s grains president Ian Pinner says the new package addresses those concerns.
“We’ve been committed to finding common ground and developing solutions that address issues and opportunities that have been raised,” he said.
“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 $50 million enhancement to GrainCorp’s planned capital expenditure over the next few years.”
The GrainCorp board supports the ADM bid, and, in a statement, its chairman Don Taylor described the latest offer as “a compelling opportunity for the grain industry in eastern Australia”.
“While our industry has a range of views on many issues, there is general agreement that Australian agriculture needs significant and ongoing capital investment to ensure we are able to respond to rapidly growing global demand for food,” he said.
“ADM’s dedication of a total $250 million of new investment to GrainCorp’s storage and logistics business, together with its commitment to maintain GrainCorp’s current [capital expenditure] program of $40-60 million annually, is to be welcomed and will enable major strides on rail-related priorities.”