Australia’s Foreign Investment Review Board (FIRB) has no objection to a Canadian firm’s takeover of the former Australian Wheat Board.
According to fertilizer and ag retail firm Agrium, which has locked up a C$1.16 billion (A$1.237 billion) all-cash bid for AWB Ltd., FIRB has granted clearance to the deal and has no objection in terms of the Australian government’s foreign investment policy.
FIRB’s declared lack of objections to Agrium’s proposal satisfies that condition of the implementation agreement between the Calgary company and AWB, Agrium said in a release Sunday.
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AWB and Agrium said they will “continue to progress the process of seeking the required regulatory, shareholder and court approvals.”
Agrium in August signed a “definitive agreement” with AWB for its deal, beating out Australian bulk handler GrainCorp’s previous A$855 million all-stock bid.
Agrium, which produces and markets fertilizers such as nitrogen, phosphate and potash, bought U.S. ag retail firm UAP in 2008 to become the biggest ag retailer in North America.
This expansion into Australia is seen as part of the Calgary company’s broader strategy to build its retail business.
AWB’s main retail asset is Landmark Rural Services, Australia’s biggest distributor of merchandise and fertilizer, with over 400 outlets across Australia and New Zealand offering rural merchandise, ag chemicals, fertilizer, livestock, wool marketing, agronomy services and real estate services.
AWB, which for over 60 years was Australia’s statutory grain marketing agency, still also operates in grain merchandising, pool management services, storage, handling and trade finance. It also maintains offices in Japan, Singapore, Hong Kong, India, Brazil and Switzerland.
But the Melbourne company’s market strength in Australian grain has eroded significantly since 2008, when it lost its wheat export monopoly powers in the wake of a scandal over kickback payments to secure sales to Iraq during Saddam Hussein’s regime.
