Ron Greentree, Australia’s largest wheat farmer, plans to lobby politicians to ensure that GrainCorp’s storage and port assets remain open to rival traders if Archer Daniels Midland (ADM)’s takeover bid of the grain handler is successful.
As The Australian Financial Review reports, Greentree wants to ensure that GrainCorp’s 280 storage sites remain open to rivals.
“I want to make sure that all the [storage] sites are open so anyone can buy from them,” Greentree told the AFR.
"I'll be ringing a few politicians to make sure that happens. I want to make sure one of the criteria that FIRB and the ACCC signs off is making sure it's a public swimming pool. Once you've paid your entrance fee, you are in."
In addition, GrainCorp controls seven out of eight grain export terminals on the Eastern Seaboard. Under arrangements enforced by the Australian Competition and Consumer Commission (ACCC), these must be open to third parties.
ADM’s due diligence of the bid will conclude on Thursday, at which time the company is expected to put a formal offer to shareholders. However, approval must also be received from the ACCC and the Foreign Investment Review Board (FIRB).
Given that ADM does not already own similar assets in Australia and would not lessen competition, this approval is likely to be given.
Meanwhile, The Australian reports that, depending on ADM’s strategy, the GrainCorp takeover bid may not be in farmers’ best interests.
If ADM is interested mainly in short-term profit rather than long-term sustainable growth, more remote and less economic infrastructure may not be upgraded and farmers will suffer.