ADM/GrainCorp: Australia’s FDI rules in operation

Author: | Published: 12 Dec 2013

A fact-based analysis of ADM’s proposed takeover of Australia’s GrainCorp, and its rejection on national interest grounds

In a rare move earlier this month, the Australian Treasurer rejected Archer Daniels Midland (ADM) takeover proposal for GrainCorp. Inevitably, there has been much media comment on the decision, and its impact on Australia’s political and foreign relations dynamics. However, what tends to be lost in the noise of generally self-serving public statements and responses to what is a superficially extraordinary decision is an appreciation of the ordinary Foreign Investment Review Board (FIRB) processes and the attendant legal considerations.

A drawn-out takeover bid process

After a FIRB-sanctioned 19.9% stake building exercise and two spurned approaches (the first of which became public on October 22 2012), on April 26 2013 ADM finally entered into a conditional agreement to proceed with a takeover bid for GrainCorp with a cash value of A$13.20...