Archer Daniels Makes $2.77 Billion Bid for GrainCorp

Oct 22, 2012

ADM Woos Australian Rival GrainCorp With Exclusive Bid

Illinois-based agriculture giant Archer Daniels Midland (ADM) has put a $2.76 billion cash bid on the table to purchase Australian rival GrainCorp. The offer was made public in a news release on Monday, where GrainCrop disclosed that ADM offered $11.75 a share, a 33 percent premium to its Friday traded share price. GrainCrop is in the midst of reviewing the proposal, but hasn’t disclosed its decision on the offer.

The offer has conditions attached, including exclusivity, due diligence and a recommendation to GrainCrop’s board to favor its bid. The bid signals ADM’s plan to expand its global presence outside of the U.S. The move isn’t ADM’s first attempt to grow its business. Less than a year ago, ADM pulled out of the race to buy Viterra, which was eventually bought up by Glencore for CAD$2.2 billion.

GrainCorp was founded in 1916 and in its infancy was part of the New South Wales state government’s Department of Agriculture. The company evolved and became privatized in the 1980s and acquired other Australian grain handlers including Vic Grain, Grainco and Hunter Grain. Australia is currently ranked the second-largest wheat exporter in the world.

Video: Is China Buying US Soybeans + USDA Nov 14th Crop Report could be “Game Changing”

After a week of a U.S./China trade truce, markets/trade is skeptical that we have not seen a signed agreement nor heard much from China or seen any details. There are rumors that China is buying soybean futures & not the physical. Trust in Trump?
12 MMT of U.S. soybean purchases by China by year-end is better than 0 but we all need to give it more time and give it a chance to unfold. China did lower the tariffs on Ag and is buying U.S. wheat and sorghum.
U.S. supreme court could rule against Trumps tariffs, but the Trump administration does have a plan B.
U.S. government shutdown is now the longest in history at 38 days.
But despite a U.S. government shutdown we will be getting a USDA November crop report next Friday and it could be “game changing.” If the USDA provides a bullish surprise with lower U.S. corn and soybean yields and ending stocks that are lower than expected both corn and soybean futures will break out above their ceilings at $4.35/bu and $11.35/bu respectively.
The funds continued their selling in live and feeder cattle futures on continued fears that the Trump administration want to lower U.S. beef prices. The fundamentals have not changed, only market psychology has.
Stocks markets continue to worry about a weak U.S. job market, but you can blame ChatGPT for that. In the future, we will have a more efficient, productive and growing economy with a higher unemployment rate until we have more skilled AI workers.
After 34 new record highs in the S & P 500 and 124 new records in the NASDAQ in 2025 we are back to a correction and investor profit taking as AI valuations may have gotten too stretched near-term ahead of NVDA’s 3rd quarter earnings announcement on Nov. 19th. But this is not an AI bubble.
75% of Tesla shareholders approved a $1 trillion pay package for Elon Musk!
It has rained in South America in the last 7 days, but both the American and European models agree that Central Brazil remains dry in the next 14-days!

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