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Australia: Barley marketing concern ABB Grain Ltd. said on February 11 it was in preliminary discussions about a possible merger with grain logistics and malting concern AusBulk Ltd, according to Dow Jones Newswires. "These discussions are incomplete and no agreement has been reached," ABB Grain said in a statement. "ABB's board remains focused on strengthening the company's core business base whilst exploring growth opportunities within Australia and offshore."

ABB's confirmation that it was in preliminary discussions with AusBulk followed a report about the talks in the Australian Financial Review newspaper on February 13. CommSec analyst Charles Hyde said a merger between the two companies was inevitable and would deliver significant cost savings. "We believe that a merger between ABB and AusBulk is a natural next step in the rationalisation of the Australian grains industry," Mr Hyde wrote in his report. "It... would create synergy gains of A$16 million ($US12.59 million) per annum." He said the activities of the two companies would complement each other.

John Murray, AusBulk's managing director, said Dec. 15 that ABB Grain would be a natural fit for the company. "The two companies fairly well complement each other in their core businesses" and their shareholders, he said then. Both ABB Grain, which markets barley and other grains, and AusBulk are based in South Australia state. The companies have engaged investment bankers to advise on a merger, the Australian Financial Review newspaper reported on February 13.


13 February, 2004