Agricultural firms look ripe for the taking - 20 Oct, 2010 10:33 AM
ANALYSTS and industry executives anticipate the pace of consolidation among agricultural companies to increase in the coming 12 months as deep pocketed global players move to diversify production risk. More than $6 billion has been spent on agriculture acquisitions in Australia, a figure that will rise beyond $7 billion if AWB shareholders agree to a takeover by Canada's Agrium at a meeting on November 16, The Australian Financial Review reports.
Agrium has followed Canadian agribusiness Viterra to Australian shores. Viterra bought South Australia's biggest grains handler ABB Grain for $1.6 billion last year.
GrainCorp is now viewed as an attractive acquisition, and struggling rural services group Elders, animal feed producer Ridley, wheat and cotton farmer PrimeAg and sugar producer Maryborough Sugar Factory are among a shrinking list of companies that could be taken over. Australian agricultural companies are viewed favourably because of their proximity to Asia, which means lower freight costs for producers and is where demand for wheat, barley and canola is forecast to climb 39 per cent in the next decade.
The Australian Financial Review - Source: http://www.afr.com
