Scheme of arrangement

by World Grain Staff
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In announcing the merger, Viterra and ABB said the transaction, valued at approximately A$1.6 billion (C$1.4 billion), was comprised of a combination of cash and shares, including a special dividend to be paid by ABB.

It was also noted that the ABB directors "unanimously recommend that ABB shareholders vote in favor of the proposed scheme of arrangement, in the absence of a superior proposal and subject to an independent expert concluding that the proposal is in the best interests of ABB shareholders. The transaction has also been unanimously approved by the board of directors of Viterra."

At the time of the announcement, Schmidt told shareholders: "Over a considerable period of time, our respective companies have developed a solid understanding of each other’s operations, management philosophies and strategic goals. This relationship has culminated into a transformational combination that will drive significant value for all shareholders, destination customers and growers.

"We are creating a leading global food ingredients supplier at a time when markets are expanding. With assets in the key exporting geographies of Australia and Canada, the new company will have enhanced access to high-growth markets and margin opportunities. We will be financially stronger and better able to access capital and manage risks required to succeed in the global marketplace."

In an interview with World Grain, Schmidt pointed out that the combined company will be a leading global exporter of wheat, barley and canola.

"If you look at the measurement of the leading export countries in the world, Australia and Canada are two of the top three with a combined market share of 37 percent of the wheat, barley and canola. That makes the combination very compelling."

According to Schmidt, grain and oilseed producers in both countries will benefit from the merger in several ways: an expanded international customer base and access by ABB Grain to Viterra’s customer base.

"If we combine Viterra’s significant international marketing expertise in grains, oilseeds and specialty crops with ABB Grain’s reputation as a quality supplier of barley, wheat and pulses, we think that the combination will be in a better position to support the interests of Australian farmers on an international scale," he said.

In addition, if the merger is approved, Viterra will integrate its research and development programs into the new company. One of the research programs under way is the development of a drought-tolerant canola that would be a major benefit to Australian farmers in drought-prone regions.

However, while the plan appears to have many benefits for shareholders of ABB, concern has been expressed by Australian farm groups, including the South Australian Farmers Federation Grains Industry Committee, over plans to have control of ABB Grain headquartered in Canada.

ABB Grain shareholders have been encouraged to go to www. ViterraAustralia.com to access a copy of the Scheme of Arrangement. The companies said shareholders should read both Part A and Part B of the Scheme booklets in their entirety before making a decision on whether or not to vote in favor of the Scheme and the Constitutional Amendment.

ABB Shareholders are scheduled to vote Sept. 9 on the proposed scheme. If the shareholders approve the deal, another meeting of ABB shareholders later the same day will consider a constitutional amendment to remove a 15% ownership cap that currently limits the number of shares an individual ABB shareholder can own. A court hearing is also scheduled in Australia for Sept. 10 to approve the takeover, if necessary.

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