THE BID by grain breeder Australian Grain Technologies (AGT) to purchase rival InterGrain has failed.
Earlier this week the owners of InterGrain, the Western Australia Government-run Western Australian Agriculture Authority (WAAA) and Grains Research and Development Corporation (GRDC) notified AGT they were ceasing negotiations regarding the InterGrain sale.
AGT chief executive Haydn Kuchel said he was disappointed with the outcome, but added it would be business as usual for his company.
“We continue to believe the integration of InterGrain’s breeding activities into AGT would be in the best interest of farmers, particularly those in Western Australia,” he said.
“However, we respect the vendor’s decision and will move on.”
The production sector has called for a continued focus on improving barley breeding in Australia in spite of the decision.
GrainGrowers said it had supported the takeover, but said now both companies needed to focus on their respective breeding programs.
“We were not opposed to the AGT acquisition of InterGrain because we felt it would secure important barley germplasm for the benefit of Australian growers said David McKeon, GrainGrowers general manager, policy and innovation.
He said GrainGrowers felt InterGrain’s uncertain financial position meant the takeover would be a good move for the Australian grains industry.
However, he said now the deal was off, it was important InterGrain’s owners made a decisive decision regarding the business’s long term future.
“Given the deal is now off, it is extremely important that InterGrain’s shareholders, the WA Government and the GRDC, explore all available opportunities to ensure wheat and breeding programs remain competitive and in the best interests of Australian growers.”
Dr Kuchel confirmed the deal was not stopped because of concerns from the Australian Competition and Consumer Commission, (ACCC) which was required to grant approval due to the large market share a merged entity would have had.
“Negotiations were stopped at the request of the vendor,” he said.
The deal was seen as a natural fit for both businesses. AGT is Australia’s largest cereal grain breeder, with a number of the most widely grown wheat varieties in the country.
InterGrain, on the other hand, is renowned for its barley breeding program, which has released popular varieties such as LaTrobe and Spartacus CL.
Dr Kuchel did not rule out the prospect of a further bid for InterGrain.
“We look forward to any opportunities we might have in the future to invest into the InterGrain business.”
Operationally, he said the end of negotiations did not pose any difficulties for either business.
“Due to ACCC requirements there was no merging of any business functions whatsoever, so it is as you were on that front.”
For its part, the GRDC said in a statement it was disappointed the transaction was not completed, but said the shareholders of InterGrain were confident its variety pipeline affords the company a strong base to re-position itself in the Australian cereals breeding market.