Australian Treasurer Joe Hockey ruled today against the USD2 .2 billion takeover bid by Archer-Daniels-Midland Co. of GrainCorp Ltd. The rejection had prompted a record share drop of the one of the largest crop handlers in Australia and a dip in the local currency. However, Hockey said he was open for any plans by ADM to increase its stake in the grain company to 29.4%.

Treasurer Joe Hockey, saying that the US company's AUD12.20 per share offer was not in the interest of the country, and stated, "This proposal has attracted a high level of concern from stakeholders and the broader community. Now is not the right time for a 100 percent foreign acquisition of this key Australian business."

Shares of GrainCorp closed at a 22% decrease to AUD8.72 in Sydney. Hockey's statement indicated the first time Australia through its treasurer had blocked a US company from acquiring domestic assets, said law firm Minter Ellison. BBY Ltd said ADM, because of this development, would have to wait for a political climate change for the opportunity to take full control of GrainCorp.

Sydney-based analyst at BBY Dennis Hulme said, "It's a long-term game being in grain trading and making these strategic acquisitions." Hulme also added that GrainCorp could make other strategic acquisitions, and that Melbourne-based agricultural feedstock maker Ridley Corp could be a possible target. GrainCorp in 2008 had placed a AUD415 million for Ridley, but dropped it afterwards.

ADM, the largest corn processor in the world, agreed to acquire GrainCorp in a price per share transaction in April. GrainCorp's stock traded around that level until the West Australian newspaper said in a report published on November 15 that Australian Prime Minister Tony Abbott was most likely to veto the deal.

In a statement, ADM Chief Executive Officer Patricia Woertz expressed her disappointment and said the company will be reviewing its capital allocation. ADM spokeswoman Victoria Podesta said the company will not making an appeal on the decision. GrainCorp Chairman Don Taylor also expressed his dismay over the Australian government's decision in a released statement.