August 29, 2003

AWB Limited (AWB) Chairman Brendan Stewart today announced AWB had completed the acquisition of Wesfarmers Landmark Limited (Landmark) from Wesfarmers Limited (Wesfarmers), for a net purchase consideration of A$718 million and an enterprise value of A$825 million.

Landmark is a market leading diversified rural services business.  It is Australia's leading supplier of agricultural inputs and a major provider of a broad range of other rural products and services.

"In bringing together AWB and Landmark, this transaction positions the expanded AWB as unquestionably the leading agribusiness in Australia.  The acquisition of Landmark will enable AWB to diversify its earnings base and reduce the cyclicality of its earnings, while strengthening the competitive position of Australia's agricultural produce in world markets," said Mr Stewart.

"AWB's expansion in rural and regional Australia will complement our core wheat focus, the Single Desk, and provide a strong platform for further growth, particularly in financial services. 

"We remain totally committed to the Single Desk marketing system and maximising net returns for wheat growers," said Mr Stewart.

AWB Managing Director Andrew Lindberg said Landmark is a logical strategic fit for AWB - it is an excellent business in our core sector with a broad customer base in rural and regional Australia.

"Landmark's key senior management team, including Managing Director Mark Allison, is committed to continue leading the business.  This management team has overseen the successful integration of a number of acquired businesses and Landmark is well positioned to grow," said Mr Lindberg.

"The acquisition underscores AWB's commitment to providing an outstanding service to Australian farmers.

"Our core business will remain wheat, and AWB International, which manages the Single Desk marketing system, will retain its sole focus on maximising returns for wheat growers.

"This acquisition extends o ur long-term focus on and commitment to agriculture and rural Australia," said Mr Lindberg.

To fund the purchase AWB will issue $250 million in new equity through a combination of an institutional placement, a share purchase plan and an underwritten Dividend Reinvestment Plan.

Transaction highlights:

The acquisition of Landmark is entirely consistent with AWB's strategic and financial objectives.   The acquisition will, among other things:

• strengthen AWB's core grain  business;

• diversify AWB's grain revenue base across a broad range of agricultural products and farm inputs;

• provide access to over 100,000 customers and 430 outlets;

• provide strong growth opportunities in areas such as the provision of financial products to Australian farmers, as well as improving market access for Australian agricultural products;

• be earnings per share positive in 2004 and in excess of 35% by 2006 on a pre goodwill and post synergies basis;

• produce strong returns for AWB, with the projected return on equity for this transaction meeting AWB's targeted return on equity of 15% by 2005.

AWB is currently a substantial shareholder in Futuris Corporation Limited (Futuris), holding 14.2% of Futuris' issued capital.  The Board of AWB is considering its options with respect to its investment in Futuris in light of today's announcement. AWB will not be proceeding with the application presently before the Treasurer to lift its shareholding above 15%.

Overview of Landmark
Landmark is Australia's largest distributor of merchandise and fertiliser products in Australia, which it sells to more than 100,000 customers through its national distribution network of 430 outlets.  Its outlets are a mix of company owned stores, franchisees, members and agents.  Landmark also provides a broad range of other products and services to its customers, including the marketing and sale of livestock and wool products and the provision of agronomy, insurance, real estate and financial services.  Landmark is based in Sydney, and employs more than 1900 people mainly in rural and regional Australia.  Wesfarmers' insurance business, Wesfarmers Federation Insurance Limited (WFI), is not being acquired by AWB but Landmark will continue to sell WFI products as the leading insurance agent for WFI and will also distribute fertiliser for CSBP Limited. 

Outlook
AWB also today revised its forecast of domestic wheat production for 2003/04, to 22 - 24 million tonnes, from the previous forecast range of 20 – 22 million tonnes. In the context of the revised outlook, AWB anticipates maintaining a fully franked dividend in 2004 at 25 cents per share.