The ink is now dry on the official deal that will see global grains giant Louis Dreyfus purchase Namoi Cotton, subject to the relevant government and shareholder approvals.
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Louis Dreyfus (LDC) announced today it had signed a binding agreement to buy up the remaining 83 per cent of Namoi Cotton shares by means of a scheme of arrangement, to go with the 17pc of the company it already owns, with the official transfer of ownership set to take place in the middle of the year if the approvals are all cleared.
LDC head of cotton Joe Nicosia said the deal marked an important milestone in the company's 111 year history in Australia as it seeks to beef up its cotton offerings.
"The proposed transaction reflects LDC's long-term commitment to growing with Australia, promoting sustainable agricultural practices, supporting farming communities and contributing to local economic growth," he said.
"The addition of Namoi Cotton into our Australian cotton operations also aligns with LDC's global strategy to reinforce its leadership in core merchandising activities - in this case by strengthening our service to local cotton farmers, through an expanded ginning and logistics footprint."
Namoi Cotton is one of Australia's best known cotton businesses.
It was founded in 1962 in the early days of the cotton industry in Australia and now is a vertically integrated cotton processing and supply chain business, with a ginning capacity of 1.6 million bales annually, along with an extensive upcountry network of origination and logistics operations across major growing regions.
This footprint includes 10 cotton gins in New South Wales and southern Queensland, as well as three warehouse facilities with a combined static capacity for half a million bales.
"As a longstanding partner of LDC for the past decade, we look forward to working closer with a leading global agribusiness and cotton merchant," said Tim Watson, Namoi Cotton Executive Chairman.
LDC currently owns its 17pc interest in Namoi Cotton and operates two joint ventures with Namoi Cotton, Namoi Cotton Alliance (NCA) and Namoi Cotton Marketing Alliance (NCMA).
The implementation of the scheme of arrangement is expected in mid-2024.
The scheme of arrangement to acquire the remaining shares of Namoi Cotton is subject to a number of conditions which must be satisfied or, if applicable, waived.
These conditions include regulatory approvals and approval by Namoi Cotton's shareholders.
This would mean Australian Competition and Consumer Commission (ACCC) and Foreign Investment Review Board (FIRB) approval at a government level along with 75pc shareholder support for the sale.