AWB recommends Agrium takeover

Agrium Inc. is a step closer to taking over Australian grain concern AWB Ltd. after the latter's board unanimously approved Agrium's takeover bid over a competing offer.

Calgary-based Agrium launched an unsolicited bid for the Australian grain handler in an attempt to establish a toehold in the grain-rich country.

A rival Australian grain exporter, GrainCorp, was believed to be mulling a bid to trump Agrium's $1.50 per share offer. On Monday, AWB's board recommended Agrium's bid, effectively ending any chance GrainCorp Ltd. had of competing.

"We are pleased with the AWB board's decision to support our offer and expect the transaction will bring immediate value to both AWB and Agrium stakeholders," Agrium chief executive Mike Wilson said.

"Agrium’s extensive experience in crop inputs and range of products, and commitment to the grain handling business, can only help to better serve our customers," AWB chairman Peter Polson said.

Agrium's offer is a 37 per cent premium to where AWB shares were trading before the offer on Aug. 13. A formalized proposal for AWB shareholders to approve is expected some time in September.

If it's successful, the deal would be the second major link-up between Canadian and Australian agribusinesses in recent months. In late 2009, Canada's biggest grain handler, Viterra Inc., bought ABB Grain for $1.4 billion.

In March, Agrium Inc. announced it was abandoning its more than year-long bid to acquire CF Industries Holdings Inc. That deal was worth $5.5 billion.