ADM wins backing to snap up GrainCorp, despite objections
THE $3.6 billion to be paid for GrainCorp would deliver a practical monopoly to American investors, but producers were less worried about who owned the group and more worried about whether it worked.
Archer Daniels Midland has already won the backing of the ACCC to snap up the group but New South Wales Nationals Senator Fiona Nash wants both Treasurer Chris Bowen and the Foreign Investment Review Board to act in the public interest to halt the sale.
GrainCorp owns seven of the eight major wheat exporting ports along Australia's east coast.
Ms Nash said as Australia's largest agribusiness, GrainCorp did not require foreign investment.
Beyond its storage, handling and loading capacity, GrainCorp also acts as a buyer, meaning it has the potential power to muscle out other grain suppliers to its own advantage.
However, its industry position - including the fact it buys and sells its own grain - means it is given close scrutiny by the ACCC.
"Handing over these privileged assets - a virtual monopoly - to a foreign company like ADM, again, is not in the national interest," Senator Nash said.
The Treasurer declined to discuss the deal.
The Foreign Investment Review Board has a policy of not commenting on specific applications.
AgForce Queensland grain president Wayne Newton said GrainCorp infrastructure lacked necessary investment, meaning growers were held up during peak times.
"If they are taken over by AMD, with the capital they might improve the situation - might," Mr Newton said.
"AMD may well not spend any more money and further allow the assets to deteriorate, which would make them more unreliable.
"Or they may make it more difficult for others in the trade to participate."
In its "bidder's statement" published on the Australian Stock Exchange, ADM pledged to operate GrainCorp "in largely the same manner" as its current operators.
"As growers and Australian producers, we would prefer to keep it in Australian hands but, in reality, we know Australian investment houses don't see a lot of value in agricultural commodity companies," Mr Newton said.
"It's just not an area of interest to most Australian investors."