Just a month after confirming it would push ahead with a $1.5 billion takeover bid for Australia's big United Malt Group, French agribusiness group, InVivo, has already received a green light from competition regulators here and in Canada.
The Australian Competition and Consumer Commission and the Canada Competition Commission confirmed they did not see the need to further scrutinise the move by InVivo's Malteries Soufflet to buy the world's fourth biggest barley malting business, and its related grain handling and craft brewing supplies interests.
Shareholders in the former GrainCorp malt division, which was listed independently in early 2020, will receive $5 a share if the United Malt sale gets regulatory approval from competition and foreign investment regulators.
The deal would make Malteries Soufflet the world's biggest malt company.
It would also leave just one Australian-owned malster in the country - South Australia's family-owned Coopers Brewery.
United Malt owns Australia's Barrett Burston Malting business plus four processing plants in Britain, including newly expanded Scottish malt houses at Inverness and Arbroath, and North America's Canada Malting Company and Great Western Malting businesses and their nine grain receival sites.
Barrett Burston, founded in Melbourne in 1912, has malt houses in Welshpool in Perth, Geelong in Victoria and Pinkenba in Brisbane's port precinct, producing about 250,000 tonnes of malt annually for brewers and distillers.
Given the wide distribution of its Australian operations, which generally don't share the same footprint as its main rival, the bigger Joe White Maltings, the ACCC assessed the risk of a substantial lessening of competition was low.
An ACCC representative said based on the information available the competition watchdog decided a public review of the impact of the French company's takeover was not required, given there was limited overlap with other parties in the local malt market.
The decision also took into account that Malteries Soufflet had no existing malt houses in Australia and there were a large number of maltsters, breweries and distilleries which would continue to compete for barley and for the supply of malted barley.
Like the French farmer-owned co-operative, Malteries Soufflet, Joe White Maltings is owned by French malting giant, Boortmalt, which is part of the 11,000 member farming, milling and malt processing co-operative, Axereal.
United Malt has told the Australian Securities Exchange that unless the Canadian Commissioner of Competition's notice of approval was rescinded by August 23, the Malteries Soufflet takeover would satisfy its requirements.
Share buying interest in United Malt Group also suggests the investor market seems quite confident the sale will go through.
A year ago UMG's share price was around the $3.60 mark, battered by Canadian drought costs and the ongoing impact of pandemic demand disruption.
The price struggled to get any higher until the expanding French co-op group's intentions were made public in April.
Confirmation at the start of July that the takeover move was official sent the share price zooming up to about $4.80 - territory it has continued to hold for the past month.
United Malt's board has unanimously supported the bid and recommended shareholders vote in favour of the takeover scheme of arrangement, subject to an independent expert concluding the offer is in the best interests of UMG investors.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
