ADM Sells 20 Percent Stake in GrainCorp

Archer Daniels Midland (ADM) announced it has agreed to sell its 20 percent stake in Australia’s GrainCorp for a total consideration of A$387 million (US$287 million).

Under the terms of the sale, which will be conducted as an underwritten sale to an underwriter, ADM will divest its shares at a per share price of A$8.53 (US$6.33).

“As part of our ongoing portfolio management, we carefully considered our equity investment position in GrainCorp and determined that we could better meet our long-term returns objectives by reallocating that capital,” said Juan Luciano, chairman and chief executive officer of ADM. “This transaction will allow us to further reduce our invested capital, and it will provide cash that we can redeploy to higher-return investments as we continue to execute our balanced capital-allocation framework.”

Indeed, the announcement of the sale of the stake comes during the same week that ADM announced it was expanding its oilseed crushing capacity in Ukraine and plans to expand its soy crushing capacity at multiple sites across Europe.

“Production of sunflower seed in the Ukraine has more than doubled in the last ten years, and this new facility will allow us to better and more efficiently serve our customers in this region,” Anton Povkhan, ADM general manager of EU Softseed Crush told Food Ingredients First.

“This facility will equally serve our food and feed customers in the region as we produce similar amounts of meal and oil products from sunflower seed and rapeseed.”

ADM acquired its stake in GrainCorp. in 2012 – a year before its offering of $3 billion to take over the company was rejected by Australia’s Federal Treasurer, Joe Hockey.

ADM attempted to sell its GrainCorp holding in July of this year at a per share price of A$8 in an auction managed by advisory firm Lazard, reports World Grain, but abandoned the sale after offers reached no higher than A$7 per share.