GRAINCORP LIMITED — M&A Activity 2003

Jun 16, 2003

GrainCorn Limited ABN 60 057 186 035

For Immediate Release

1. June 2003

GRAINCORP WELCOMES ACCEPTANCE OF MERGER PROPOSAL

Leading agri-food business GrainCorp Limited today welcomed the announcement by the Board of Grainco Australia that it will recommend that its shareholders accept GrainCorp's merger proposal.

The GrainCorp offer of \$105 million (\$1.39 per share) is subject to the final adjustments and represents a clearly attractive offer to Grainco shareholders based on the minor conditions attached to it.

The Agreement gives Grainco Australia shareholders a choice of cash and/or reset preference shares in GrainCorp and provides them with a choice of continuing as a stakeholder in the merged entity.

After conducting extensive market investigations, the ACCC found no objection to the merger proceeding in an announcement made by it on 23 May 2003.

"Our proposal evolved from the existing partnership with Grainco Australia in Bulk Terminals Australia, and reflects the strong working relationship.

An extensive due diligence process has identified synergistic and operating benefits that with average seasonal conditions are projected to produce a positive contribution to EPS.

"By extending the company's operations and service culture to Queensland GrainCorp will further diversify its geographic and earnings base. This was a major factor in the successful merger with Vicgrain, and provided the company with valuable experience in the integration of two major grains businesses."

"GrainCorp will maintain a Toowoomba divisional office as part of its commitment to the Queensland grains industry," added Mr Keene.

The merger will require a change to the constitution of GrainCorp to allow for reset preference shares to be issued and to create an additional Board position for a Queensland representative until the 2004 AGM. An Extraordinary General Meeting (EGM) of shareholders will be scheduled to approve these changes.

"We are looking forward to explaining the benefits of the proposal and the funding mechanism to shareholders and other investors. Subject to the approval of shareholders, we would hope to finalise the merger by the end of the financial year."

GrainCorp has been through an extensive program of modernisation, geographic expansion and supply chain diversification – including public listing on the ASX in 1998, the merger with Vicgrain in 2000 and the purchase of Allied Mills in 2002 in a JV with Cargill Australia.

The recent drought has failed to distract GrainCorp from its long-term strategic plan.

"We are ready to build on the strength of our business and continue with our strategy of geographic and earnings diversification. The merger with Grainco is the next step." Added Mr $Keene$

For more information please contact: Mario Falchoni - Corporate Relations Manager, on (02) 9325 9132 or 0418 401 415.

GrainCorp Limited is a leading Australian agri-food business specialising in grain supply chain management, from seed development to grain storage, transport, logistics and marketing. GrainCorp currently employs 850 permanent staff and has a market capitalisation of \$500 million.

Grainco Australia Limited is a geographically diversified bulk commodity, logistics and trade facilitation group. Grainco Australia is an unlisted public company with share ownership restricted to eligible grain growers and staff.