Ann: Merger Announcement , page-3

AWB, GrainCorp to merge
July 30, 2010 - 10:32AM

Grains marketers GrainCorp and AWB have said that the two companies will merge to create one of Australia's largest diversified agribusinesses.

The two companies said that GrainCorp will issue to AWB shareholders one GrainCorp share for every 5.75 AWB shares they own, subject to an AWB shareholder vote.

The transaction will result in a nil premium merger with the exchange ratio based on the volume weighted average prices of shares in each company over the last six months.

GrainCorps shareholders will hold 58 per cent and AWB shareholders 42 per cent of the merged company.

The combined entity will have a market capitalisation of more than $2 billion.

The merger is expected to add to earnings per share for both GrainCorp and AWB shareholders, with synergies in excess of $40 million per annum.

The two companies said the merged entity will be more attractive to investors, with greater stock liquidity, improved access to capital and significant efficiencies.Directors of GrainCorp and AWB unanimously support the proposal.

AAP