News 265 views last update:6 Aug 2012

AWB and ABB join forces

Australian grain giants AWB Ltd and ABB have confirmed that they will merge. By teaming up, the two together will be Australia's largest wheat and barley exporter with an estimated value of $2 billion or more.

The two companies are widely regarded as a good fit in the newly deregulated wheat export market, and their chiefs, Gordon Davis (AWB) and Michael Iwaniw (ABB), have both said further industry consolidation is inevitable.

But the proposal, confirmed to the Australian Stock Exchange last Friday, has aroused concerns among grain growers about potential for reduced grain handling and marketing competition, particularly in South Australia where ABB has most of its bulk handling network.

It is also set to put pressure on the big east coast grain handler, GrainCorp, to find a merger partner, or an acquisition strategy, to enable it to compete on a similar scale.

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