NEW ZEALAND-based PGG Wrightson has agreed on a deal to sell its seeds division, PGG Wrightson Seeds, to a Danish-based agribusiness, DLF Seeds, pending shareholder and regulatory approvals.
PGG Wrightson Seeds is a major player in the Australian pasture sector, being a major supplier of fodder crops such as ryegrass, phalaris and legume species such as clover and lucerne.
The proposed sale values the PGG Wrightson Seeds business at $A383 million, a marked premium to the market value of the business segment.
In a statement, DLF Seeds said it was attracted to the PGG Seeds business as it was complementary to its own enterprise.
“We see PGG Wrightson Seeds as the leading temperate forage seed player in the Southern Hemisphere, with DLF occupying a similar position in the Northern Hemisphere,” DLF chief executive Truels Damsgaard said.
PGG Seeds customers have been told they will potentially see new northern hemisphere products via the DLF acquisition.
PGG Wrightson chief executive Ian Glasson said the seeds business would benefit from being part of a truly global company with a diversified offering.
While in Australia the name PGG Wrightson is synonymous with the seeds industry, in New Zealand it also has a major rural services business, similar to Elders or Landmark in Australia, which will be the major focus of the company into the future.
To get through, the deal needs PGG Wrightson shareholder approval along with a pass from the NZ foreign investment review process (Overseas Investment Act), ticks on the competition front from the Australian Competition and Consumer Commission (ACCC) and its NZ counterpart and various regulatory approvals in South America, where PGG Wrightson Seeds has businesses.