GrainCorp to demerge global malting business

GRAINCORP has announced today it intends to demerge its global malting business, resulting in two independent ASX-listed companies, and a cost saving of about $20 million.

Stated intention: GrainCorp has announced the demerger of its global malting business.

GRAINCORP has announced today it intends to demerge its global malting business, resulting in two independent ASX-listed companies, and a cost saving of about $20 million.

The company’s grains and oilseeds businesses will be combined into an integrated grains and edible oils business, known as New GrainCorp, while the global malting and craft brewing distribution business will be called MaltCo.

The proposed creation of the two companies is expected to deliver an annual cost saving to New GrainCorp of about $20 million.

GrainCorp chairman Graham Bradley said the board believed the demerger would “unlock significant value for shareholders by establishing two unique and high-quality ASX-listed agribusinesses with focused management teams”.

GrainCorp chief executive Mark Palmquist said the portfolio review demonstrated the two businesses have “different characteristics” and would benefit from operating separately.

“A demerger would provide both MaltCo and New GrainCorp with increased flexibility to implement independent operating strategies and capital structures, and allow them to attract investors with different investment priorities,” Mr Palmquist said.

The demerger and ASX listing of MaltCo is set to be implemented by the end of the year, with the integration of New GrainCorp set to commence immediately subject to shareholder, final board, court and regulatory approvals.

MaltCo will be the world’s fourth largest independent maltster following the proposed demerger, with malting houses in the US, Canada, Australia and UK.

New GrainCorp will become an integrated global agribusiness with grain handling, storage, trading and processing operations in Australia, New Zealand, North America, Asia, Europe and Ukraine, with a focus on grains, oilseeds, pulses, edible oils and feeds.