GrainCorp concludes agreement with AGC

by Holly Demaree
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WEST PERTH, AUSTRALIA — GrainCorp and its consortium partners agreed to conclude its partnership with the Australian Grains Champion (AGC) after the AGC withdrew its proposal on Sept. 19 to commercialize the CBH Group.

GrainCorp announced on Feb. 17 that it had joined a consortium that proposed privatization of the CBH Group, an 83-year-old cooperative, and listing it on the Australian Stock Exchange.

The consortium, led by the AGC, included multiple unnamed Australian superannuation funds. AGC presented the proposal to the board of CBH with a request that it be put to CBH’s grower members. The CBH board rejected the offer on March 14. The board then released survey results on April 26 stating 78% of grower members supported the board’s decision to reject the AGC offer.

The proposal to commercialize did raise the question about whether CBH should remain a cooperative. CBH then released a booklet on Aug. 15 outlining the options, benefits and trade-offs in relation to potential changes to structure and governance.

“We have consistently said that any decision on AGC’s proposal should be one for Western Australian (WA) grain growers,” said Mark Palmquist, managing director and chief executive officer of GrainCorp. “While we believe the proposal designed by AGC was unique and attractive, CBH is conducting its own review of its structure and governance, which will take some time to finalize. At the same time, WA growers are working to ensure their farm businesses are prepared for what is shaping to be an historically large harvest. In this light, it is appropriate to afford WA growers time and space to address these other important priorities for their businesses.”

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