Canada’s largest grain company is extending its reach Down Under.
Viterra has signed an agreement with ABB Grain Ltd. to purchase all of the outstanding shares of the Australian agribusiness company. 
The $1.4 billion takeover deal will be financed through a combination of cash and shares.
The deal must be approved by 50 percent of ABB shareholders representing 75 percent of the company’s shares. About 47 percent of shareholders are producers.
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ABB’s board of directors is unanimously recommending approval, in the absence of a superior proposal coming forward and subject to an independent expert concluding that the deal is in the best interests of shareholders.
The agreement must also receive approval from Australian courts and a government agency that reviews foreign investments.
The deal will provide ABB shareholders with a number of pricing options, averaging around $9.35 Aus per share (around $8.40 Cdn).
Rex McLennan, chief financial officer for Viterra, said the company hopes to close the deal by mid-September.
He added the company is confident the deal will be approved by shareholders.
Company officials say the benefits of the deal are numerous, including:
* The new company will have a 37 percent market share of wheat, barley and canola in the two countries, and will be able to offer customers more security of supply, given the different crop producing seasons in the two countries.
* It will gain a competitive advantage in shipping and logistics.
* It will provide for a more consistent distribution of earnings throughout the year.
* The combination will provide annual savings of around $27 million within three years.
Following completion of the transaction, four of ABB’s current directors will join Viterra’s expanded board of directors, with one serving as deputy chair.
ABB will continue to do business under that name in Australia, although it will be completely owned and managed by Viterra.
