SYDNEY--In a significant move, Louis Dreyfus Company, a European agriculture merchant, has agreed to acquire Namoi Cotton, an Australia-listed company, in a deal valued at approximately US$68.5 million.
Namoi announced on Friday that Louis Dreyfus would acquire the remaining 83% of its issued capital that it does not already own. As part of the deal, shareholders will receive 51 Australian cents (33.4 U.S. cents) in cash, which includes a dividend of 1.0 Australian cent.
According to Joe Nicosia, Louis Dreyfus's Head of Cotton, the acquisition is based on the belief that Namoi's network of cotton gins and its well-established business relationships over the past 62 years align well with LDC's activities. Nicosia states that this move will undoubtedly add value to both entities.
Interestingly, the proposal offers shareholders a 44% premium to the share price prior to the November 28 announcement of Louis Dreyfus's initial proposal. However, the takeover is still subject to various conditions, including approval by Australia's foreign investment regulator.
The completion of the deal is expected to take place in mid-2024, with an additional A$0.01/share dividend being considered if the approvals process extends beyond August 31.