Elders confirms $475m buyout of rival farm inputs business Delta Ag
Agribusiness juggernaut Elders will buy out rival Delta Ag for $475 million in a move that will see the group acquire a network of 68 farm inputs outlets nationwide.
Delta operates throughout WA, Victoria, New South Wales and South Australia, selling fertilisers, seeds, animal health products, fuel, and technical advisory services to farmers via about 40 independent wholesale customers
Elders confirmed the purchase on Monday, with chief executive Mark Allison saying it would provide the group greater exposure to key local retail markets.
“Delta provides us with … a market-leading agronomy and farm advisory team to complement and extend our products and services range for rural and regional customers,” he said.
“It will also enhance Elders’ existing technical service network and its offering in ag tech and precision agriculture, through Delta’s farm advisory business and respected network of specialists.”
Delta’s leadership team, staff and operations will remain unchanged, according to Elders, despite some towns — including Gunnedah in NSW — having both Elders and Delta outlets.
Established in 2006, Delta also includes an in-house agricultural chemicals and animal health private label brand.
“Elders has a proven track record of synergy generation through backward integration and anticipates the acquisition will create meaningful value for Elders shareholders,” Mr Allison said.
Delta managing director and co-founder Gerard Hines said there was “strong cultural alignment” between the two businesses.
“Our management team will remain unchanged and we are excited to be able to continue to provide our customers with innovative and value adding business solutions with the added support of Elders,” he said.
The acquisition will now need to be cleared by the Australian Competition and Consumer Commission but is expected to be completed within the first half of next year.
Elders went into a trading halt on Monday for a $246m capital raising to help pay for the acquisition.
Confirmation of the acquisition comes on the same day Elders — which was established in 1839 and is one of Australia’s oldest companies — reported a 55 per cent fall in net profit after tax to $45.1m for the 12 months to September 30.
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