ABB Takeover gets Approval from Shareholders

Submitted by Jim Thesiger on 10 September, 2009 - 05:51

The shareholders of ABB Grains (ABB) have voted in favour of a $1.6 billion takeover bid of Viterra, the agribusiness giant of Canada. The deal will lead towards the emergence of world’s biggest barley, wheat and canola exporter. It is to be mentioned that shareholders of ABB Grains represents about 83 percent of the company. According to Mayo Schmidt, the chief executive of Viterra, the joint operation would help the company to appear in the market with one of the strongest balance sheets something that will enable the company to expand its customer base, find incremental working capital and to become even more competitive in the grain industry of Australia. ABB Grains have a vast global business that includes markets in 30 countries while Viterra handles 16 million tones of Canadian grains with its business in 50 countries.

Viterra went for the ABB takeover bid in April with a mixture of cash, franked dividends within the range of $9 and $9.50 and Viterra shares in the proposal. ABB Grains will worth $1.64 billion if the proposal is accepted at $9.50 per share value. ABB stocks were closed up 13c on Wednesday at $9.13. The company is expected to attend the hearing of a federal court today where it will seek approval from the court regarding the scheme. If the court approves, the scheme will be implemented on 23rd of September. Viterra will have its southern hemisphere headquarters and global headquarters of malt business at Adelaide. The southern Australian farmers are expected to harvest a good cereal crop in winter where Canadian farmers are enjoying a good harvest at present.

The combined organisation will have its primary focus on the two important harvests, share price and earning Mr. Schmidt stated. The integration of the companies is also going to be a major issue, the chief executive added. Mr. Schmidt also mentioned about Viterra’s future plans regarding its interest on the Indian and South Asia region where ABB is already operating. Viterra have just enjoyed a great year with a record profit while ABB Grains has recently went for slashing full-year profit for the third time due to a fall in the price of fertiliser. Mr. Perry Gunner, the chairman of ABB Grains expressed his high expectations from the deal and also stated that Viterra might go for introducing dividend payment since currently it is not paying any.