SYDNEY, AUSTRALIA — GrainCorp announced on July 25 that it has entered into a binding agreement to purchase GermanMalt GmbH & Co. KG for A$77 million.

GrainCorp Managing Director and Chief Executive Officer Alison Watkins said, “The European barley and malt sector has a major influence on world markets, as around half the world’s malt exports originate there and it is strategically important for GrainCorp to be an active participant in that market. The sector is also reshaping and now is the right time to enter Europe to take advantage of these changes.

“GermanMalt fits with our strategy of pursuing grain-based opportunities related to our existing businesses and growing as an ‘end-to-end’ grain supplier and processor.”

The acquisition will mean GrainCorp’s malt sales into the growth regions of Africa and South America will be more competitive and provides GrainCorp with a stronger customer supply proposition.

GermanMalt has four malt houses with 190,000 tonnes of malting capacity located in the German cities of Worms, Muelheim/Ruhr, Sangerhausen and Clingen.

The acquisition price includes working capital, predominantly barley inventory. The transaction is fully funded through a combination of working capital and term debt.