By Rhiannon Hoyle
SYDNEY--GrainCorp Ltd. (GNC.AU) suffered its second blow in
almost as many days when its chief executive quit in the wake of
Australia's rejection of a 3 billion Australian dollar (US$2.7
billion) takeover bid by U.S. agribusiness Archer Daniels Midland
Co. (ADM).
Alison Watkins will leave GrainCorp next month after three years
as chief executive to take the helm of drinks maker and food
processor Coca-Cola Amatil Ltd. (CCA.AU), which is 29% owned by
Coca-Cola Co. (KO).
News of Ms. Watkins's departure contributed to GrainCorp shares
falling a further 2% Monday to their lowest level in more than a
year. The stock had plummeted 22% Friday after Australian Treasurer
Joe Hockey blocked the sale of the grain handler to ADM on national
interest grounds.
"I have carefully weighed my options over the past two days,"
Ms. Watkins said in a statement to Australia's stock exchange. "I
had planned to leave the company at the time control passed over to
ADM."
She will succeed Terry Davis as managing director of Coca-Cola
Amatil on March 3. The company, which has a market value of A$9.32
billion, distributes Coke products in Australia, New Zealand, Fiji,
Indonesia and Papua New Guinea.
Intense lobbying by farmers and some conservative politicians
helped derail the takeover of GrainCorp by ADM--the first to be
opposed by the new Conservative government since their September
election victory. The proposed acquisition would have left 60% of
wheat shipments from Australia controlled by three companies: ADM,
Glencore Xstrata PLC (GLEN.LN) and Cargill Inc. It also would have
put almost all the country's eastern grain-export infrastructure in
foreign hands.
It has sparked a debate over the Australian government's
attitude to foreign investment at a time when several other
high-profile deals are awaiting approval, including a proposal by
Chinese miner Yanzhou Coal Mining Co. Ltd. (1171.HK) to buy out
minority investors in Sydney-based Yancoal Australia Ltd. (YAL.AU)
and delist the stock.
Mr. Hockey's decision to reject the GrainCorp-ADM proposal came
amid a row over government support for Qantas Airways Ltd.
(QAN.AU), the country's national carrier in which foreign ownership
is capped at 49%.
The takeover of GrainCorp is the first to be blocked in
Australia since former Labor Treasurer Wayne Swan opposed an A$8.4
billion merger between Singapore Exchange Ltd. (S68.SG) and
Australia's ASX Ltd. (ASX.AU) in April 2011, also on national
interest grounds. Ms. Watkins described the decision to veto the
deal with ADM as unexpected.
A senior ADM official said the Decatur, Ill.-based company
wouldn't appeal the acquisition ruling. Chief communications
officer Victoria Podesta said ADM was still considering an enlarged
stake in GrainCorp. The company has been trying to expand its
profile in Asia, a growing market for the grain and food products
ADM sells around the world.
Mr. Hockey said he would likely allow the U.S. grains giant to
boost its investment in the company to 24.9% from its current 19.9%
"to encourage ADM to demonstrate its commitment to the Australian
grains industry."
GrainCorp said Chairman Don Taylor will take on executive duties
on an interim basis until a successor for Ms. Watkins is found.
"It is with great regret that the board has accepted Alison's
resignation, however we respect her decision to move on,
particularly when a change of control in GrainCorp was broadly
expected to occur over the coming weeks," Mr. Taylor said.
Ms. Watkins will also step down from the board of Australia and
New Zealand Banking Group Ltd. (ANZ.AU), where she has been a
nonexecutive director since 2008, the statement said.
GrainCorp said an external and internal search for her successor
is underway.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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