Australia’s fifth largest grain company has been sold to a Japanese buyer.
Tokyo-based commodities trader Sumitomo Corp. announced Feb. 5 that it has acquired full ownership of Australia’s Emerald Grain.
Sumitomo had previously acquired a 50 percent share in Emerald Grain, which handles 4.5 million tonnes of Australian grain annually.
The deal will see Sumitomo acquire the remaining 50 percent equity in the company, which operates 15 grain collection facilities in the Australian states of Victoria and New South Wales and exports two million tonnes of grain annually through its port terminal facility at Melbourne.
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“As a wholly owned subsidiary of the Sumitomo Group, Emerald Grain will have access to Sumitomo’s global network, allowing Emerald Grain to expand its operations and accelerate the growth of its grain value chain in Australia,” the company said.
Sumitomo plans to use Emerald Grain to expand its grain business globally.
Details of the transaction have not been made public, but Emerald officials have indicated that the deal, which is based on the company’s estimated value, will not be subject to approval by the Foreign Investment Review Board (FIRB) and the Australian Competition and Consumer Commission (ACCC).
“FIRB and the ACCC have been consulted in relation to this transaction and both bodies have advised that they will not be examining the transaction further,” Emerald said.
According to Australia’s Fairfax Media, industry sources say typical Australian agribusiness transactions are calculated at about seven to eight times earnings before interest, taxes, depreciation and amortization, pitching Emerald’s hypothetical value at $210 to $240 million.
