AGRIUM chief executive Mike Wilson has a warning for those within the Australian grains industry that consider the carve-up of AWB a fait accompli once the Canadian agribusiness takes over.
“The assumption you should take is that AWB’s commodity business is not changing,” Mr Wilson said.
While not ruling out the option of either divesting the commodities business or entering into a joint grain marketing arrangement, Mr Wilson, in Australia this week to meet with key stakeholders in the AWB deal, said Agrium would approach the commodities arm of AWB with an open mind.
“It (AWB commodities) is a strong business and everyone should assume it will stay strong.
“We are meeting with AWB staff, and I hope that Gordon (Davis, AWB chief executive) will help me understand that part of the business better.”
There had been strong speculation within the media that Agrium was looking to off-load the business, but Mr Wilson said this was not a foregone conclusion.
However, it has long been the opinion of the market that Mr Davis considers the Landmark enterprise the jewel in the AWB crown, so if the market’s opinion is correct and he has an influence on Agrium’s decision, there may be more chance of a decision to divest.
Mr Wilson acknowledged the Landmark business was an easier fit for the Canadian retail giant, given its background, which does not include any grain marketing.
“Landmark should be a relatively easy fit for us, although we recognise that Australia is a different market - as Canadians, we understand Canada is different to America and all markets have their differences, but we do $6 billion of retail revenue each year, so it is an area we are familiar with.”
Mr Wilson said the Canadian market had taken the news of the takeover bid well.
“It clearly fits within our strategy, it helps us diversify our geographic spread and it helps strengthen our retail arm.”
Contrary to media reports earlier this week, Agrium has also been meeting with key members of Australia’s farm lobby groups.
Russell Amery, president of the Victorian Farmers Federation (VFF) grains group, said while talks were only at a very early stage, he was heartened by what Agrium officials had in mind for AWB.
“They were only very preliminary talks, but the initial reaction is positive,” he said.
Mr Wilson said he did not believe the takeover of one of Australia’s agribusiness institutions by a foreign company would be bad for Australian growers.
“AWB is not going to be weakened – we bring to the table a strong balance sheet and a wide product offering.
“Our whole business is built on the success of the customer, and we will look to invest in anything that has a value proposition for us, and for our customers.
“You can see by the fact Agrium has grown by a factor of five in recent years that we are open to ideas, and we are looking at opportunities within Australia as part of that.”
Mr Wilson said he hoped the takeover bid would be taken to a vote of AWB shareholders some time either late in October or early November.
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