Agrium Wants To Buy Former Australian Wheat Board – for Aug. 19, 2010

Canadian fertilizer giant Agrium Ltd. has started a bidding war for AWB Ltd., formerly the Australian Wheat Board.

The company was put into play July 30 when AWB directors recommended to shareholders that they agree to an offer by larger Australian rival GrainCorp.

Based on last year’s handlings, the new company would handle 14.6 million tonnes per year, making it Australia’s largest grain handler and exporter.

The move was seen as an attempt to fend off domination of Australian grain trading by large internat ional companies such as Glencore, Cargill, Bunge and Louis Dreyfus. Quoted in theSydney Morning Herald,AWB managing director Gordon Davis said the merged entity’s size would enhance its ability to

compete “rather than being picked off by some very, very large overseas companies.’’

Agrium’s unsolicited August 14 all-cash offer is for A$1.50 for each AWB share for a total price of A$1.24 billion, a 57 per cent premium on AWB’s trading price on July 29.

In addition to its grain handling and exporting facilities, AWB has a large agri-retail presence through its 430-store Landmark network , making it attractive for fertilizer distribution.

“Agrium sees significant potential to enhance the product and service offerings to the Australian and New Zealand grower,” Agrium chief executive Mike Wilson said in a release.

AWB, lost its export wheat monopoly in 2008 following a scandal involving kickback payments to secure sales to Iraq.

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Agriumseessignificant potentialtoenhance theproductand

serviceofferingstothe AustralianandNew Zealandgrower.”

– MI KE WI LSON, AGRIUM CEO

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