CANBERRA, Australia (AP) — Australia on Friday blockedthe 3.4 billion Australian dollar ($3.1
billion) takeover bid by U.S.food giant Archer Daniels Midland Co. for GrainCorp Ltd.TreasurerJoe Hockey,
invoking a rarely used power to veto foreign investment,said he rejected the 100 percent takeover of
GrainCorp because it wouldnot be in the Australian national interest.ADM, which owns anearly 20 percent
stake in GrainCorp, offered to buy the remaining 80percent of the company last year. A sweetened offer in
May amounted to12.20 Australian dollars ($12.63) a share in cash, giving GrainCorp avalue of AU$3.4
billion.The application was the most contentiousforeign takeover bid since previous governments blocked the
sale of theAustralian Securities Exchange to the Singapore Exchange in 2011 andRoyal Dutch Shell PLC was
barred from buying Australian oil and gasrival Woodside Petroleum Ltd. In 2001.GrainCorp’s share
pricetumbled 22 percent to AU$8.72 on Friday. The price was about the same asit was in October 2012 when ADM
first launched its takeover bid.GrainCorpowns more than 280 Australian grain storage sites and seven grain
portterminals and handles 85 percent of eastern Australia’s bulk grainexports."Many industry
participants, particularly growers ineastern Australia, have expressed concern that the proposed
acquisitioncould reduce competition and impede growers’ ability to access the grainstorage, logistics and
distribution network," Hockey said in astatement.Hockey said he would allow ADM to increase its stake
to 24.9 percent."Thiswould also provide a platform for ADM to build stakeholder support forpotentially
greater participation in the Australian industry as itdevelops," Hockey wrote.ADM chairman and chief
executive Patricia Woertz said the company was disappointed by the decision."Weare confident that our
acquisition of GrainCorp would have createdvalue for shareholders of ADM and GrainCorp, as well as grain
growersand the Australian economy," Woertz said in a statement.She said that Hockey requested "no
conditions or undertakings" from ADM.Giventhe rejection of its bid for GrainCorp, Woertz said ADM is
reviewinghow it will use the unutilized capital, including distributions of cashto shareholders.The Decatur,
Ill., company currently pays a quarterly dividend of 19 cents per share.ADMhas been looking to invest in
overseas suppliers and Australia is amajor exporter of commodities, including iron ore and wheat. It has
saidthat full ownership of GrainCorp would help expand its agriculturebusiness in the Middle East, Africa
and Asia.GrainCorp chairmanDon Taylor warned that blocking the deal would have
"enduringimplications" for Australia’s entire agricultural industry."Australianagriculture
has been prevented from realizing the potential benefitsfrom the significant capital ADM would have invested
in the long termfuture of the industry," Taylor said in a statement.ADM firstlodged its takeover
application in May with Australia’s ForeignInvestment Review Board, which reports to the treasurer on
whetherproposed foreign takeovers pass the Australian national interest test.Copyright 2013 The Associated
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