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Cargill to Buy AWB Grain-Trading Business From Agrium

Dec. 15 (Bloomberg) -- Cargill Inc., the grain-distributor that’s the largest closely held U.S. company, agreed to buy an Australian commodity-trading business from Agrium Inc. and pay about $300 million for an Indonesian starch producer.

Cargill’s Australian purchase will include former AWB Ltd. grain marketing, trading and storage businesses, Minneapolis-based Cargill said in an e-mailed statement today. Cargill will acquire 85 percent of Sorini Agro Asia Corporindo Tbk from PT AKR Corporindo Tbk and UOB Kay Hian Pte Ltd. for 3,500 rupiah a share, it said in a separate statement.

The AWB deal will strengthen Cargill’s presence in Australia, where it has operated since 1967. The country is forecast to become the world’s fourth-largest wheat exporter this year. Australia may export 16 million metric tons in 2010-2011, the International Grains Council forecasts, behind the U.S., France and Canada.

Cargill will pay cash for the AWB business and the deal will be completed in the first half of 2011, Agrium said in a statement. The price will be the unit’s net asset value at the completion date and a premium, Calgary, Canada-based Agrium said.

If the deal had been completed Sept. 30, net proceeds would be about A$870 million ($861 million), it said. That figure is based on the purchase price, the amount of working capital freed up because of the sale and A$240 million of debt that would be assumed by Cargill, Agrium said.

“Cargill’s expertise and knowledge in shipping large volumes of commodities should make Australian grain more competitive in more markets,” Ralph Selwood, the managing director of Cargill Australia Ltd., said in the statement.

The deal requires regulatory approval, and the companies said they expect completion in the first half of 2011.

To contact the reporters on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net; Maria Ermakova in London at mermakova@bloomberg.net; Shruti Date Singh in Chicago at ssingh28@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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