UPDATE 2-Australia's Futuris eyes role in wheat trade shake-up

(Adds recasts, adds details on industry consolidation)

By Bruce Hextall

MELBOURNE, Dec 1 (Reuters) - Australian agribusiness group Futuris Corp Ltd FCL.AX is positioning itself to take part in consolidation of Australia's grains marketing industry once it completes a major corporate restructuring.

Analysts have been betting on mergers in Australia's newly de-regulated grains industry as local players eye global expansion and seek to bulk up to compete better with commodity trading giants such as Cargill Inc [CARG.UL].

"I believe on a go-forward basis we will play a significant role in industry consolidation and strategically agribusiness is an industry that looks like it is getting ready to go into a period of consolidation," said Futuris Chief executive Malcolm Jackman.

Futuris said on Monday it planned to sell its non-core assets, including its automotive supplies business, to concentrate on its agribusiness activities and forest investments.

Jackman said the group would abandon its holding company business structure in favour of a single company structure built around Elders, the proposed new name of the company.

"We are committing to a total change in how the company operates, is structured, reports and engages with its stakeholders," said Jackman.

The group, which has a market capitalisation of $450 million, has already linked up with German commodities trader Toepfer International, forming a joint venture which hopes to have gained a 15 percent share of Australia's grain trading market by 2011.

Consolidation moved up a gear last week when the country's largest grain trader AWB Ltd (AWB.AX) and Australia's top barley exporter ABB Grain Ltd ABB.AX confirmed they were in merger talks.

An ABB spokesman said on Monday the two companies and their advisers were still working through the issues which might led to a merger proposal.

ABB, the larger company by market capitalisation at A$851.6 million, wants the larger share of the merged group based on its share performance and stronger balance sheet.

For a factbox on major players in the potential consolidation of the Australian grain industry, click [ID:nSP207429]

Australia's wheat export trade was de-regulated on July 1 this year after AWB was stripped of its monopoly on exports following a scandal over illegal payments made to the former Iraq government of Saddam Hussein.

Citigroup analyst Jonathan Snape said in a research report that ABB might turn its attention to Futuris if the merger talks with AWB failed.

Futuris revised down its earnings forecast for fiscal 2009 to an underlying net profit before one-off items of about A$60 million, from an August forecast of A$80-85 million, hit by weak economic conditions.

Asset sales, including the automotive supplies business and a 43 percent stake in Australia's largest cattle rancher, Australian Agricultural Co Ltd (AAC.AX), or AACo, were expected to raise A$350 million, the company said.

It had had numerous offers for AACo but price remained an issue. ($1=A$1.53) (Additional reporting by Sonali Paul) (Editing by James Thornhill and Ben Tan)