On Monday, United Malt Group Ltd. (UMG.AX) accepted Malteries Soufflet’s A$1.5 billion ($999 million) buyout offer, making it the world’s largest malt maker.
When the bid was launched in March, InVivo CEO Thierry Blandinieres told Reuters that the merger would expand InVivo’s malt business three years earlier than expected.
United Malt shares rose 9.1% in early trading to A$4.8, 20 cents below the offer price. It led the benchmark index (.AXJO) in percentage gains.
The cash offer is 45.3% over United Malt’s March 24 closing price of A$3.44.
Australia’s Foreign Investment Review Board (FIRB) and United Malt shareholders must approve the merger, among other regulatory conditions.
Australia has witnessed more dealmaking this year than the rest of Asia, where high-interest rates have slowed M&A activity.
United Malt, the world’s fourth-largest commercial maltster, supplies bulk malt to brewers, craft brewers, distillers, and food firms. The company processes in Australia, Canada, the US, and Britain.
Malteries Soufflet, a major malt manufacturer, has 28 malt houses across Europe, Latin America, Asia, and Africa.
United Malt Chairman Graham Bradley said the company’s board believed the offer accurately reflected its asset portfolio and expected earnings improvement.
The company’s board unanimously recommends shareholders vote yes.
Through acquisitions, InVivo wants to become the world’s largest malt producer in five years. It acquired Soufflet last year and Castle Malting in January.
It did not respond to an after-hours request for comment.
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