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GRAINCORP AND AWB ENTER INTO MERGER IMPLEMENTATION DEED: CREATING AUSTRALIA’S LEADING DIVERSIFIED AGRIBUSINESS

GrainCorp Limited (GrainCorp) and AWB Limited (AWB) today announced they have entered into a Merger Implementation Deed (MID) under which GrainCorp will merge with AWB under a Scheme of Arrangement (Scheme) between AWB and its shareholders.

Highlights: • Creates one of Australia’s largest diversified agribusinesses, operating in the grains, merchandise, fertiliser and livestock sectors and is also the world’s fourth largest commercial malt producer

• Combined company market capitalisation over $2 billion, an ASX 100 company

• EPS accretive for both GrainCorp and AWB shareholders with synergies in excess of $40 million per annum to be realised

• Increased attractiveness to investors with greater stock liquidity, improved access to capital, significant efficiencies

• Directors of GrainCorp and AWB unanimously support the proposal Scheme of Arrangement 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. GrainCorp’s shareholders will hold 58%, and AWB shareholders 42%, of the merged company. The Directors of AWB will commission an Independent Expert’s report to determine whether the Scheme is in the best interests of AWB shareholders. Subject to the Independent Expert confirming that the Scheme is in the best interests of shareholders and absent a superior proposal, each of the directors of AWB will recommend that AWB shareholders vote in favour of the Scheme and the removal of the 10% shareholder cap to permit the Scheme, and have indicated they intend to vote in favour of the Scheme and the shareholder cap removal in relation to their own shares.

The Scheme is conditional on certain regulatory and other approvals and conditions that are set out in the MID attached to this announcement. The necessary regulatory processes are expected to be completed during the second half of 2010. AWB has agreed to customary obligations that limit its ability to engage with third parties on a competing proposal, although these obligations are subject to fiduciary exceptions.

The MID attached to this announcement contains full details of these arrangements. A break fee of 1% of the transaction value is payable by AWB in certain circumstances. Strategic Rationale GrainCorp Chairman Mr Don Taylor said, “The merged company will have the scale to compete more effectively against the large global grain companies now competing domestically, and exporting grain from Australia, and places us in a strong position to take advantage of the growing food demand from Asia, the Middle East and North Africa.” AWB Chairman Mr Peter Polson said “The merger will deliver synergies in excess of $40 million per annum. There are obvious benefits in merging the two head offices and by cutting duplication throughout the organisation.” Mr Taylor said, “The merged company will be one of the largest rural focused businesses in the ASX 100.

Australian grain growers will benefit from stronger relationships with international buyers and a wider range of grain marketing alternatives, continued operation of AWB pools, finance and rural merchandising services. The new company will be a significant grain exporter, a leading Australian flour miller and the world’s fourth largest commercial malt producer.” Mr Polson said, “The business and geographic diversification that results from combining these two companies delivers a more stable earnings profile for shareholders, with the potential for increased revenues and reduced earnings risk across the company’s operations.” Mr Taylor said, “Shareholders, staff and customers will benefit from a business focused on the significant growth opportunities in rural and regional Australia.

The combination of grains, wool, livestock and a major rural retail business will provide unique insights and opportunities.” Board, Governance and Management Under the merger proposal, AWB Chairman, Mr Peter Polson, will become Chairman of the new company, GrainCorp Chairman Mr Don Taylor, will become Deputy Chairman and Ms Alison Watkins, Managing Director of GrainCorp, would become Managing Director. The Chief Financial Officer (CFO) of AWB, Mr Philip Gentry will become CFO of the merged entity. The two boards will merge. The senior management team of the combined company will be drawn from the current management teams of both GrainCorp and AWB. The merged entity will operate as GrainCorp Limited.

The corporate head office will be located in Sydney, and business functions shared across the locations where best suited. The intention, in the absence of unforeseen circumstances, is for GrainCorp to pay a final fully franked dividend of approximately 10 cents per share, to which AWB shareholders will be entitled following implementation of the Scheme, and a 5 cent per share fully franked special dividend to all shareholders of the merged company. Timing Subject to the Supreme Court making appropriate orders, it is currently expected that AWB shareholders will be sent Scheme Documentation in September 2010. This will contain the basis for the AWB Board’s recommendation and an Independent Expert’s Report. AWB Shareholders will vote at a Scheme Meeting, expected to be held in late 2010. If the Court makes an order approving the Scheme, the Scheme will become effective on the date determined by the Court, and GrainCorp and AWB will become bound to implement the Scheme. Other proposals AWB Board has considered a range of alternative proposals, including the previously announced commodities transaction with Gavilon LLC, however has concluded that the proposed merger with GrainCorp creates more value for shareholders.

Should a superior proposal emerge, the AWB Board would consider it on its merits and advise shareholders accordingly. Earnings Update The Board today reviewed the Company’s guidance and now anticipates that its profit before tax and significant items (PBT) for continuing businesses for the full year ending 30 September 2010 will be within the range of $75 million to $95 million compared to previous guidance of $85 million to $110 million. Landmark is expected to record a result materially higher than the prior financial year, despite challenging industry conditions, with the business expected to be the largest contributor to the group PBT. Improving margins, increasing market share and a focus on productivity improvement have all benefited Landmark. Within the Australian Commodity Management (“ACM”) business, whilst the second half has seen some modest improvement in the Grain Marketing business, the full year result is expected to be significantly lower than the prior financial year. This is largely driven by the continuation of difficult market conditions and lower margins in wheat marketing.

The remainder of the ACM businesses are all performing to expectations. For further information: Peter McBride Belinda Seal GM Corporate Affairs Investor Relations Manager Tel: (03) 9209 2174 Tel: (03) 9209 2887 Mob: 0417 662 451 Mob: 0438 535 975 Advisors

AWB advised by Deutsche Bank

Legal advisers to AWB – Freehills.

Foster's Group Limited (Foster’s) notes media reports this morning of an internal earnings target of $84 million for its Australia and New Zealand wine business.

The number represents an internal management EBIT target for the Australia and New Zealand wine business for the 2011 financial year presented to an internal sales conference yesterday. Foster's will provide a detailed update on group financial performance with the release of its financial results for the 12 months ended 30 June 2010 on August 24.

Further information: Media Investors Troy Hey Chris Knorr Tel: +61 3 8626 2085 Tel: +61 3 8626 2685 Mob: +61 409 709 126 Mob: +61 417 033 623.

Australian Vintage Limited has appointed Neil McGuigan as Director and Chief Executive Officer effective 21 July 2010.

Neil McGuigan was previously Australian Vintage’s General Manager of Production & Supply and was appointed interim Chief Executive Officer in March 2010. Australian Vintage Chairman, Ian Ferrier, said that Neil’s involvement in the wine industry over the past 30 years made him an ideal candidate for the position of Chief Executive Officer.

After three months as interim Chief Executive Officer, Neil McGuigan said he was looking forward to the challenge of taking on the role on a permanent basis. ‘While the Australian wine industry continues to go through challenging times, we remain focused on managing our costs, cash flow and balance sheet, whilst at the same time continuing to produce great wines and build brands that consumers around the world recognise and prefer’.

Neil McGuigan and the Company are still discussing the terms of his employment agreement. Full disclosure of that agreement will be made as soon as all details have been finalised.

Further information: Ian Ferrier, Chairman Ph + 61 2 8263 2300.

Australian Vintage Limited has appointed Neil McGuigan as Director and Chief Executive Officer effective 21 July 2010.

Neil McGuigan was previously Australian Vintage’s General Manager of Production & Supply and was appointed interim Chief Executive Officer in March 2010. Australian Vintage Chairman, Ian Ferrier, said that Neil’s involvement in the wine industry over the past 30 years made him an ideal candidate for the position of Chief Executive Officer.

After three months as interim Chief Executive Officer, Neil McGuigan said he was looking forward to the challenge of taking on the role on a permanent basis. ‘While the Australian wine industry continues to go through challenging times, we remain focused on managing our costs, cash flow and balance sheet, whilst at the same time continuing to produce great wines and build brands that consumers around the world recognise and prefer’.

Neil McGuigan and the Company are still discussing the terms of his employment agreement. Full disclosure of that agreement will be made as soon as all details have been finalised.

Further information: Ian Ferrier, Chairman Ph + 61 2 8263 2300.

Goodman Fielder Limited (GFF) this morning said it was expecting to incur a non-cash writedown of around NZ$16 million ($13 million) on its deferred tax assets following a change to tax regulations by the New Zealand government. However the owner of many major grocery brands, including Wonder White and White Wings, said that the New Zealand tax changes would have positive impact on the company’s bottom line from FY12.

Under the changes, the New Zealand government has scrapped building depreciation for tax purposes, while reducing the corporate rate of tax from 30% to 28%.

Managing director, Peter Margin, said it would not affect the company’s underlying profitability or ability to maintain its dividend payout.

Meanwhile the company said that including the writedown, it was expecting a post-tax profit to be in the range of $158 million to $165 million, down from $177 million last year.

However, not including one-offs, normalised net profit for the full year would be in the range of $181 million to $188 million, up from $166 million in the previous corresponding period.

At 1121 AEST, Goodman Fielder shares were trading up 2c to $1.395.

Elders Limited (ELD) shares tumbled over 40% Tuesday morning after the beleaguered rural services company downgraded its full-year profit guidance from a $55 million profit to a loss of between $8 million and $14 million. The company said the collapse in earnings was due to a slump in revenue as farmers moved to generic, cheaper brands, compounded by the previous downgrade to MIS sales.

Chief executive, Malcolm Jackman said that the revised earnings outlook reflected fundamental changes in the Rural Service and Forestry markets which had outweighed the improvements in operations, cash and cost management by the company.

Mr Jackman said costs to sales across the company were at unsustainable levels.

”We have initiated action to re-set our cost to serve in the near term to that required for satisfactory returns and to improve sales revenue performance over time,” Mr Jackman said.

He said Elders planned to reduce its cost to serve by $45 million, or 11%.

Mr Jackman said the company would cut staff including the resignation, with no replacement, of Mike Guerin, the company’s chief operating officer.

Overall, it was predicted staff numbers would be slashed by around 10%.

Despite the dire trading outlook, the company said its balance sheet remains strong, with over $100 million in cash in the bank and was within debt covenants.

Elders, which first listed 29 years ago, hit an all-time low of 44.5c at 1036 AEST.

Wesfarmers Limited (WES) said, in reference to the Federal Government’s proposed Resource Super Profits Tax, that any threat to earnings is a threat to the level of dividend the company can pay. In a letter to shareholders today, the conglomerate’s chairman Bob Every said the proposed tax would have an impact on the company that goes beyond its coal mining operations.

“The flow-on effect on a broadly based conglomerate like ours might be seen as analogous to the potential impact of the tax, not just on the resources industry, but on the wider national economy,” Mr Every said.

“While we are not, in principle, opposed to the introduction of a well designed and structured resource tax as a replacement for multiple state based royalties, the proposed tax as announced is not what Australia needs."

Wesfarmers consists of eight operating divisions and has more than 200,000 employees.

Mr Every said Wesfarmer’s resources division paid an effective tax rate of 41% last year, or 51% if the Stanwell rebate is included.

He said as well as the tax rate itself, the company’s concerns were related to sovereign risk, the design of the tax and the consultation process.

Such concerns have been voiced by numerous mining companies since the tax was announced in early May.

”It is my strongly held view that the proposed new super profits tax would not only make Australia less competitive in the global resources industry, but also have significant flow-on effects for the broader economy and society,” Mr Every said.

In conclusion, Mr Every said Wesfarmers would continue to present its concerns to the Government.

As at 1413 AEST, Wesfarmers shares were up 5c to $28.87.

Metcash Limited (MTS) posted a record annual profit of $227.6 million for the year to 30 April 2010. The company also provided guidance of 6-8% growth in underlying EPS for FY11.

Metcash’s result was in line with guidance and was a 12.4% improvement on the previous year’s $202.5 million profit.

The company said the result was struck on a 4.9% rise in wholesale sales from $10.97 billion to $11.51 billion despite persistent low inflation in core grocery categories and the receding effects of the government stimulus package, which boosted sales in 2009.

Looking at other results, EBITA grew 8.6% to $415.4 million, operating cash flow rose 18.8% to $294.7 million and underlying earnings per share grew 8.4% to 32c per share.

Metcash declared final dividend of 15c per share, which it said would be fully franked at 30%.

CEO, Andrew Reitzer, said every division had focused on cost containment in the prevailing low price inflationary environment, while continuing to secure further supply chain improvements and technological innovations to improve warehouse throughput.

“While current trading conditions remain subdued, we are confident of further growth in our earnings per share in the 2011 financial year, subject to economic conditions remaining stable”, Mr Reitzer said.

The company expects the low sales growth in the food and liquor sectors would continue to December 2010.

”This is due to the government stimulus felt in FY09, low food price inflation and interest rate increases (150 basis points in FY2010),” Metcash said.

”Against this background, the company provides guidance of 6-8 per cent growth in underlying EPS for FY11.”

The company said guidance is given subject to a number of observations including comparative underlying FY10 EPS is 32 cps, FY11 would be a 53 week year, interest costs for FY11 are in line with expectations, the loss of the ALH business previously announced to the market and that the results would include a full year of Metcash’s share of Mitre 10 results.

At the close of trade Monday, Metcash shares were trading at $3.85.

GrainCorp Limited (GNC) posted a net profit after tax of $52.7 million in its 2010 half year financial results, up 63% from a year earlier. In the announcement released last night, the company also declared a fully franked interim dividend of 15c per share.

GrainCorp interim CEO, Ian Wilton, said it was a strong result, which highlighted the contribution of the malt business to earnings.

“The aim of the acquisition of United Malt Holdings was to reduce earnings volatility,” Mr Wilton said. 

“This was successfully achieved with the $58 million contribution to EBITDA from malt, in line with expectations.”

He said earnings from grain storage and port elevation were lower than last year due to lower 2009/10 grain production.

The company adjusted its full year EBITDA guidance from $180 to $210 million to between $190 and $210 million and expect a full year NPAT of between $75 and $90 million.

“Earnings from malt sales are on budget, demonstrating the value of our strong customer relationships and long term supply agreements,” Mr Wilton said.

“Second half earnings from grain handling will not be as strong as the same period in 2009.”

GrainCorp received more than 1 million tonnes of grain ex-farm for the export market.

“We don’t expect to receive similar ex‐farm volumes this year, mainly due to reduced export demand resulting from record high world grain stocks and the high value of the Australian dollar during much of 2010.”

“However, recent significant devaluation of the Australian dollar will increase the international competitiveness of Australian grain, and this may boost export activity out of eastern Australia before the end of the current financial year.”

Mr Wilton concluded by saying the currently good subsoil conditions should boost yields.

“Crop forecasters are anticipating an average area will be planted this year,” he said.

“The forecasters also predict that current grain prices will encourage growers to change their crop mix, planting less barley, more canola and pulses, and about an average area of wheat.”

As at 1029 AEST, GrainCorp shares were up 24c to $5.66.

GrainCorp Limited (GNC) posted a net profit after tax of $52.7 million in its 2010 half year financial results, up 63% from a year earlier. In the announcement released last night, the company also declared a fully franked interim dividend of 15c per share.

GrainCorp interim CEO, Ian Wilton, said it was a strong result, which highlighted the contribution of the malt business to earnings.

“The aim of the acquisition of United Malt Holdings was to reduce earnings volatility,” Mr Wilton said. 

“This was successfully achieved with the $58 million contribution to EBITDA from malt, in line with expectations.”

He said earnings from grain storage and port elevation were lower than last year due to lower 2009/10 grain production.

The company adjusted its full year EBITDA guidance from $180 to $210 million to between $190 and $210 million and expect a full year NPAT of between $75 and $90 million.

“Earnings from malt sales are on budget, demonstrating the value of our strong customer relationships and long term supply agreements,” Mr Wilton said.

“Second half earnings from grain handling will not be as strong as the same period in 2009.”

GrainCorp received more than 1 million tonnes of grain ex-farm for the export market.

“We don’t expect to receive similar ex‐farm volumes this year, mainly due to reduced export demand resulting from record high world grain stocks and the high value of the Australian dollar during much of 2010.”

“However, recent significant devaluation of the Australian dollar will increase the international competitiveness of Australian grain, and this may boost export activity out of eastern Australia before the end of the current financial year.”

Mr Wilton concluded by saying the currently good subsoil conditions should boost yields.

“Crop forecasters are anticipating an average area will be planted this year,” he said.

“The forecasters also predict that current grain prices will encourage growers to change their crop mix, planting less barley, more canola and pulses, and about an average area of wheat.”

As at 1029 AEST, GrainCorp shares were up 24c to $5.66.