Australia's biggest wheat producer down AWB Limited (ASX: AWB) is now very close to be acquired by Canadian firm Agrium Inc. ((TSX and NYSE: AGU) as the Foreign Investment Review Board (FIRB) gave its nod to the deal.

Early this week, the Foreign Investment Review Board announced that the acquisition of AWB by Agrium would be advantageous to all company shareholders.

In a statement to the stock exchange, the FIRB has formally notified Agrium that there are no objections to the proposed acquisition in terms of the Australian Government's foreign investment policy.

In the previously announced scheme of arrangement, Agrium will acquire AWB shares at a price of A$1.50 per share, which will mean $1.2 billion for the shareholders of AWB.

The statement further clarified that AWB and Agrium is now on the second wave of discussions and finalise regulatory, shareholder and court approvals.

Advantageous to both

Analysts said this deal would be beneficial to both companies as AWB will now have wider access to the North and South American markets served by Agrium; while the Canadian firm will benefit from the Asia-Pacific markets served by AWB.

AWB widens sales potential

AWB has increased its forecast of delivering high quality noodle wheat to Asia with a selling price capped at $383 per tonne for grade A1 noodle.

AWB's General Manager Commodities, Mitch Morison, said his recent visits to customers in Asia confirmed keen interest in the Australian crop and in South Korea the ongoing requirement for supply of noodle wheat was constantly reinforced.

"While in South Korea we signed a large contract for supply of noodle wheat to key customers, which we will meet through a combination of last year's crop and new season grain from growers in our early commitment program," Mr Morison said.