ADM makes investment commitment to Aus farmers, wants support for GrainCorp deal
SYDNEY Nov 27 (Reuters) - Archer Daniels Midland Co (ADM) will invest A$200 million in agricultural infrastructure should it win approval for its A$2.8 billion ($2.56 billion) takeover of Australia's GrainCorp, the U.S. agribusiness said, in a move seen as a sweetener for farmers ahead of a regulatory deadline.
Some farm groups and politicians from within the ruling Liberal-National coalition have opposed the takeover, arguing that Australian assets should not be sold to foreign firms and that a sale could risk the country's food security.
ADM on Wednesday said it would invest A$200 million in grain handling and infrastructure, and also committed to joining an "industry-agreed" protocol for reporting wheat stocks across its bulk grain storage sites, two central policy goals of Australian farmer groups.
"We have had substantive discussions with growers, policymakers and other stakeholders, and we've been committed to finding common ground and developing solutions that address issues and opportunities that have been raised," Ian Pinner, president of ADM unit ADM Grain, said in an announcement to the Australian Securities Exchange.
Analysts said the move was an attempt to win support from local farmers, although they were unsure whether $200 million would be enough.
Farmers welcomed the commitment but said they would need greater details before deciding on whether to support ADM's bid for GrainCorp, the largest handler of grains on Australia's east coast.
"It shows that they want to put money on the table, but we need to work out where they intend to spend that money and how they intend to run the business," said Dan Cooper, a farmer in New South Wales and a committee member of the New South Wales Farmers Federation.
Shares in GrainCorp rose more than 4 percent following the ADM pledge, buoying optimism the takeover would get the green light.
The move comes ahead of a December 17 deadline by which Australian Treasurer Joe Hockey said he would make a final decision on whether to approve or reject the GrainCorp takeover.
Amid farmer opposition to the ADM deal, a political divide has emerged between the ruling Liberal Party, which is seen as pro-investment, and its junior partner, the rural-based National Party, who oppose the deal.