Canadian group Viterra is seeking to acquire ABB Grain, one of Australia's largest grain handlers and owners of export infrastructure, including storage silos and loading terminals.
According to The Australian Financial Review, the companies are in talks on a possible combination that would create an agricultural group with greater scale to help win lucrative Asian and Middle Eastern supply contracts.
Any deal would be the much-anticipated first move for sector rationalisation but would also represent the failure of local industry hopes of a national champion emerging to compete against the likes of North American giant Cargill.
The negotiations follow the collapse last year of merger talks with AWB after outspoken sections of ABB's 15,000 grower-shareholders baulked at the prospect of taking on potential liabilities attached to AWB's involvement in the Iraq oil-for-food scandal.
Shares in ABB jumped 76ยข, or 12.2 per cent, to $7 yesterday - valuing the company at $1.2 billion - while Viterra is understood to have discussed a possible offer of between $9 and $9.50 a share.
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