AUSTRALIA'S second biggest farming services player, Ruralco, has approached rival Elders about a merger deal to create a $500 million rural services group to rival market leader Landmark.
Ruralco chairman Richard England outlined the proposal in a letter to his Elders counterpart, John Ballard, last month. The letter followed an initial meeting between the two chairmen and their chief executives, Malcolm Jackman at Elders and Ruralco's John Maher, a few weeks earlier.
Mr England confirmed yesterday that he had approached Elders about a potential merger.
"Yes, we have [approached them]," he told The Australian Financial Review. However, Elders had turned down the offer, saying the proposal did not contain enough detail. "They have declined to engage," he said.
Ruralco believes there would be significant cost savings in merging Australia's No. 2 and No. 3 rural services groups and that they could close unprofitable stores to compete better with Landmark.
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