THE BID by grain breeder Australian Grain Technologies (AGT) to purchase rival InterGrain has failed.
Last week the owners of InterGrain, the Western Australia Government-run Western Australian Agriculture Authority (WAAA) and Grains Research and Development Corporation (GRDC) notified AGT they were ceasing negotiations regarding the InterGrain sale.
AGT chief executive Haydn Kuchel said he was disappointed with the outcome, but added it would be business as usual for his company.
“We continue to believe the integration of InterGrain’s breeding activities into AGT would be in the best interest of farmers, particularly those in Western Australia,” he said.
“However, we respect the vendor’s decision and will move on.”
Steve Thomas, deputy chief executive of the GRDC, which has a 38 per cent stake in InterGrain said he was disappointed the transaction was not completed.
“It’s disappointing on a couple of levels, first from a human perspective, a lot of people have put a lot of time and effort into this deal,” Dr Thomas said.
“Secondly, on an industry level, we felt this deal was constructive for the Australian grains sector, we looked at Intergrain’s research and what we felt was the best way to get their varieties to market and we felt working with AGT, a market leader, was the best way forward.”
However, he said GRDC remained committed to delivering the best value possible for Australian grain growers through its InterGrain investment.
“It is always disappointing when it doesn’t come off, but that is the reality, so moving forward we are going to look to see what is a good fit for InterGrain.”
The production sector has called for a continued focus on improving barley breeding in Australia in spite of the decision.
GrainGrowers said it had supported the takeover, but said now both companies needed to focus on their respective breeding programs.
“We were not opposed to the AGT acquisition of InterGrain because we felt it would secure important barley germplasm for the benefit of Australian growers said David McKeon, GrainGrowers general manager, policy and innovation.
He said GrainGrowers felt InterGrain’s uncertain financial position meant the takeover would be a good move for the Australian grains industry.
However, InterGrain chief executive Tress Walmsley said the company had a long-term commitment to the industry and was in a strong position moving forward with several strong wheat and barley varieties on its books.
She said high grain production across Australia had helped boost Intergrain’s revenue, while the company has also moved to cut operating costs.
Ms Walmsley said the decision was an endorsement of the ongoing work at InterGrain from its two shareholders and welcomed the
opportunity to reposition the business to deliver value to Australian grain growers.
“The team at InterGrain is in a good position to deliver new and improved varieties for growers well into the future,” Ms Walmsley said.
She said the company already had a strong position in the barley market, through varieties such as La Trobe and Spartacus CL and added she hoped to make inroads in market share in the wheat sector too.
A Clearfield wheat variety, Chief CL Plus and a noodle wheat, Ninja, were released last year, while Ms Walmsley said there was also exciting material in the pipeline.
Dr Kuchel confirmed the deal was not stopped because of concerns from the Australian Competition and Consumer Commission, (ACCC) which was required to grant approval due to the large market share a merged entity would have had.
“Negotiations were stopped at the request of the vendor,” he said.
The deal was seen as a natural fit for both businesses. AGT is Australia’s largest cereal grain breeder, with a number of the most widely grown wheat varieties in the country.
InterGrain, on the other hand, is renowned for its barley breeding program.
Dr Kuchel did not rule out the prospect of a further bid for InterGrain.
“We look forward to any opportunities we might have in the future to invest into the InterGrain business.”
Operationally, he said the end of negotiations did not pose any difficulties for either business.
“Due to ACCC requirements there was no merging of any business functions whatsoever, so it is as you were on that front.”
WAAA has yet to comment officially on the situation.
The story InterGrain pledges business as usual after takeover deal fails first appeared on Farm Online.