Agrium Inc., fresh off a major acquisition of AWB Ltd.’s fertilizer and grain assets in December 2010 (GM Dec. 6, 2010), is now in line to take over Australian fertilizer wholesaler HiFert. AWB already owned 50 percent of HiFert.
Elders Ltd., Adelaide, South Australia, said March 17 that Agrium has a call option to purchase its indirect 50 percent stake in HiFert. The option is exercisable by Agrium within 90 days, and has been granted in return for nominal consideration. Completion of the sale under the option is conditioned on regulatory and other approvals being obtained by Dec. 31, 2011.
Elders said its 50 percent indirect interest in HiFert had previously been classified as non-core and outside its strategic focus. The interest, which is held through Elders’ 50 percent shareholding in HiFert’s parent company, ELF Australia Pty Ltd., has been for sale for some time.
Elders said it wants out of ELF and the commitments this involves. The shedding of HiFert couldn’t come too soon for Elders, which said as part of the arrangements it has been released from its fertilizer sourcing obligations from HiFert. This enables Elders to source fertilizer independent of ELF and HiFert.
“The outcome is that Elders now has greater, and more flexible, fertilizer sourcing options,” said Malcolm Jackman, Elders managing director. “With the winter cropping season approaching, we are moving to realize the benefits this confers for our company and our clients. With the seasonal conditions for winter cropping being highly favorable to date, we are ready for the strong anticipated demand for fertilizer. Growers can count on Elders as a reliable and competitive supplier for their needs.”
The Melbourne-based HiFert was founded in 1984, and supplies fertilizer, storage, manufacturing, and distribution facilities through distribution centers in Townsville and Brisbane, Queensland; Port Adelaide, Kadina, and Port Lincoln, South Australia; New Castle, New South Wales; and Geelong and Portland, Victoria.
HiFert supplies more than 600 outlets on the East Coast of Australia. Since the unit has been held for sale, AWB did not report earnings for it in the first half ending March 31, 2010. For the first half of 2009 it had a loss of A$4.7 million (GM Aug. 23, 2010).In addition, Agrium, according to recent reports, has also eyed New Zealand rural services company PGG Wrightson (PGGW), but has opted not to proceed with that acquisition. Agrium would not comment on the PGGW reports.