Agrium chief executive officer Mike WilsonJeff McIntosh
Agrium Inc. says the board of Australian grain marketer AWB Ltd. is recommending its shareholders approve a takeover by the company.
The Calgary-based farm products company said it had launched an unsolicited bid for AWB in hopes of establishing a retail presence in Australia.
Agrium will pay $1.50 (Australian) per share for AWB, or approximately $1.1-billion (Canadian).
The Calgary firm said AWB's board had deemed its bid superior to an earlier one from Australian grain handler GrainCorp Ltd. worth around $829-million.
"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," said Agrium's president and CEO Mike Wilson.
"We are excited about the opportunity to work with AWB employees to build on the solid relationship that AWB has already developed with customers."
Mr. Wilson said Agrium will primarily use cash on hand to fund the acquisition, and if required, will access unused lines of credit which are in excess of $1-billion (U.S.).
Documentation will be mailed to shareholders in early October and shareholder meetings to approve the purchase will be held in the first half of November.
Agrium won't be the first Canadian agribusiness in Australian. Last year, Canada's biggest grain handler Viterra Inc. bought ABB Grain for $1.4-billion (Canadian).
Shares in Agrium rose 1.18 per cent Monday to close at $72.88 on the Toronto Stock Exchange.