Queensland Cotton, Australia's oldest and largest cotton producer, has received a friendly AUD134m (US$104.2m) takeover bid from Singapore-based agricultural group Olam.

Olam is one of the world's top five cotton companies with a presence in all key cotton exporting countries except Australia, and the board of Queensland Cotton has recommended that shareholders accept Olam's offer.
 
Olam chief executive Sunny Verghese says the company plans to use Queensland Cotton as a springboard to expand into other agricultural commodities in Australia.

Queensland Cotton has forecast a sharp drop in annual earnings for 2007, with the effects of the Australian drought cutting profit to AUD2-4m, down from the AUD13.1m posted in 2005/06.