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GrainCorp Limited (GNC) today confirmed completion of the acquisition of United Malt Holdings Limited (“UMH”) for $757 million. The company said the purchase of the Canada Malting Company (Canada), Great Western Malting (USA), Bairds Malt (UK), and Barrett Burston Malting (Australia) transforms GrainCorp from an eastern Australian storage and handling service provider into an international agribusiness operating across four countries.

GrainCorp said half the company’s earnings would now be derived from barley and wheat processing.

The company said to complete the acquisition it successfully raised about $600 million through the issue of new shares.

GrainCorp said the acquisition has effectively doubled the company’s size, meaning it is now the world’s fourth largest commercial malt producer and has a market value on the Australian Stock Exchange exceeding $1 billion.

Managing director Mark Irwin said the individual brand names and brand identities of the four malt businesses would be retained to maintain their brand strength.

GrainCorp said it would form a new business unit known as ‘GrainCorp Malt’, which is to be headed by former UMH CEO, Jim Anderson.

“It is important for us to emphasise that this acquisition was a unique opportunity to diversify the GrainCorp earnings base at a competitive price, it was not about ‘synergies’ or restructuring the malt businesses,” Mr Irwin said.

“While GrainCorp has a valuable portfolio of grain handling, storage and logistics assets, a major strategic weakness over the last few years has been our reliance on seasonal harvest conditions across the eastern states of Australia.”

He added that about 50% of total annual earnings would be derived from malt and flour production as a result of the acquisition.

"This means that our earnings will be more stable, and we will be able to more reliably generate value for shareholders,” Mr Irwin said.

The company also confirmed that the ACCC had provided advice that it did not propose to intervene in the acquisition.

As at 1430 AEDT, GrainCorp shares were down 7c to $6.62.

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