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ADM keeps foreign focus, despite GrainCorp setback

Archer Daniels Midland revealed an emphasis on foreign expansion, and an appetite for deals, despite the collapse of its attempt to buy Australia's GrainCorp, as the bruised US agribusiness giant unveiled a package of sweeteners to investors.

The ethanol-to-cocoa dealing group - one of the ABCD of big agricultural traders with Bunge, Cargill and Louis Dreyfus – said that of the $1.4bn it expected to invest in capital projects next year, "the majority" would be spent outside the US.

The allocation comes despite the failure of the group's $3.1bn acquisition of GrainCorp after the deal was blocked by the Canberra government, a rejection which has caused considerable furore, although mainly in Australia itself.

Joe Hockey, the Australian treasurer who made the decision to reject the takeover, has attracted considerable criticism, but there has been some pressure too on Don Taylor, the GrainCorp chief executive.

'Strategic opportunities'

Patricia Woertz, the ADM chief executive, said that group remained "confident and enthusiastic about the opportunities ahead", and signalled that the group was still open to deals next year.

"Our strong balance sheet and solid cash flow generation will allow for capital investments in growth projects with strong returns… and still leave us sufficient ability to take advantage of strategic opportunities that may arise in 2014," she said.

However, the group was also to return extra cash to shareholders, revealing a 26% jump, from 19 cents per share to 24 cents per share, in its dividend, which will take an increasing proportion of its earnings.

Ms Woertz said: "Historically, we have paid out approximately 20-25% percent of earnings.

"Going forward we will aim for a range of 25-30%, thereby allowing shareholders to participate more directly in the earnings stream of the company."

Share buyback

Furthermore, ADM unveiled plans to buy back 18m shares by the end of next year, valued at $725m at current prices.

"To the extent that ADM's credit metrics improve throughout the year and the company receives significant proceeds from asset sales, the company will consider further distributions to shareholders," the group added.

ADM shares stood 1.8% higher at $41.05 in midday deals in New York.

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