Chief executive Mark Palmquist said the sale, which is subject to regulatory approval and also includes the benefit of $35 million in franking credits to GrainCorp, would create balance sheet flexibility for the company.
GrainCorp’s former joint venture partner in Allied Mills, Cargill Australia, has also sold its 40 per cent stake to PEP.
“Allied Mills has built a deserved reputation for innovative food solutions tailored to the changing needs of our customers,” said Allied Mills Managing Director Joseph Di Leo said.
“Our combination with Pinnacle will offer customers a one-stop-shop across bread and sweet bakery products. It’s an exciting time for the sector and with PEP committed to investing in the combined company’s strategic assets, there is very solid growth potential.”