Shareholders in the former Australian Wheat Board have voted in favour of a marriage proposal from fertilizer and ag retail giant Agrium.
According to the Calgary company in a release late Monday, 80 per cent of AWB Ltd. shareholders, representing 97.8 per cent of shares, have voted to support the deal, well above the thresholds of 50 and 75 per cent respectively.
The former wheat board’s shareholders also voted 97.7 per cent to amend the company’s constitution, lifting its 10 per cent cap on share ownership.
Agrium said it will apply Wednesday for court approval for the merger, after which it expects to complete its deal by Dec. 3 and start moving toward integrating the two companies’ operations.
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The Canadian company in August signed a “definitive” agreement with AWB to proceed with its C$1.16 billion (A$1.237 billion) all-cash bid, outmuscling Australian bulk handler GrainCorp’s previous A$855 million all-stock offer. Agrium said Tuesday it plans to use mainly “cash on hand” to fund the deal.
Australia’s Foreign Investment Review Board (FIRB) granted clearance to the deal last month, putting forward no objection in terms of Australian foreign investment policy.
The expansion into Australia is seen as part of Agrium’s broader strategy to build its ag retail business, which became the biggest in North America when it bought U.S. ag retail firm UAP in 2008.
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 operates in grain merchandising, pool management services, storage, handling and trade finance.
But the Melbourne company’s market strength in Australian grain has ebbed 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.
“We now look forward to working with AWB employees to build on the excellent relationship that they have developed with customers,” Agrium CEO Mike Wilson said in Monday’s release.
“Agrium’s focus will be to work with our AWB colleagues to enhance efficiencies across the agricultural value chain, including offering new products and services for the benefit of Australian and New Zealand growers, once the transaction is finalized.”
AWB employees and customers are expected to benefit from being part of a “larger, financially stronger organization with greater access to working capital and potential for future investment in Australia,” Wilson said.
