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 AWB, ABB merger 'would benefit shareholders' 

AWB, ABB merger 'would benefit shareholders'

27 Nov, 2008 12:06 PM
Talks are continuing about the possibility of a merger of Australia's two largest grain companies.

ABB's managing director Michael Iwaniw and AWB's managing director Gordon Davis have openly said that they would be keen to pursue the idea.

With both companies posting significant profits this year – ABB announced a full-year net profit of $48.8 million on Tuesday and AWB posted a $64.3m profit last week – it would create a company with the lion's share of market capitalisation in the Australian grain market.

And with the first year of a completely deregulated grain market causing angst for a number of growers, there is probably an attraction for many in dealing with a company that combines Australia's previous single desk marketers for wheat and barley.

Mr Iwaniw said any merger or acquisition would have to benefit shareholders.

* Extract from a report in Stock Journal, SA, November 27 issue.

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Date: Newest first | Oldest first
Yes this will benefit the share holders...but it will not benefit the wheat growers as there will be one fewer company to compete for their wheat.

And we all know what will happen to the prices when all the grain companies finaly merge...thanks to a deregulated marketing system and the dismantling of the single desk....and when this happens. don't let me hear any complaining from the ones who supported deregulation.

Posted by A Wheat Grower, 27/11/2008 8:07:44 PM
'Benefit shareholders' That's a strong statement.

Now, seeing that the majority of the country has been in the grips of a drought, and, with the exception of last year, coping with low prices (like this year) and that the majority of growers have had to sell their shares with these companies just to survive, I would think that when they mention 'shareholders' they mean 'businessmen'.

Some of these don't really care about who they bring down, as long as their own pockets have a silver lining. As 'A Wheat Grower' has said, its not going to benefit the growers, who built both of these companies with their own 'hard earned' money in the first place.

I'm surprised that they have even hinted about such a merger. I thought that they would just push it through regardless.

Posted by Esme, 28/11/2008 8:28:14 AM
Would "A wheatgrower" please note that supporters of deregulation are not complaining, unlike yourself. Single deskers never wanted any possible competition for their grain - fortunately we now have choice of whom we sell our produce to.

Several Aussie grain marketers will need to merge to remain competitive.

Posted by Get real, 28/11/2008 9:51:41 AM
Perhaps 'Get Real' can tell us who will be competeing for our grain ... and where will we have the choice to sell our grain to when all the grain marketers finally merge into one large company?

Their only thought will be for their shareholders benefit. It will not be the growers' interests that they will have in mind when they offer the lowest price possible.

Perhaps you can tell us: why, when years ago there was a choice of marketers to sell our wheat to in a deregulated system, why didn't growers receive a decent payment then for their grain?

And why is it going to be so much better now, under a deregulated system?

Posted by A wheat grower, 28/11/2008 8:34:49 PM
Get real is living in a fantasy world, with deregulation growers are enjoying a fifty dollar discount to the world price. Under regulation it sat at around ten. A merger with the now non-grower owned traders is only going to antagonise this situation. Growers may well be in a better position if they invest their productive capital in traders shares and not actually produce anything next year.
Posted by Ken, 30/11/2008 9:00:09 AM

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ABB Grain’s MD, , Michael Iwaniw.
ABB Grain’s MD, , Michael Iwaniw.
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