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PGG Wrightson extends deal spree with Aussie takeover

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PGG Wrightson, the New Zealand farm services group, underlined its return to the takeover trail as it purchased Australian seeds company Grainland Moree, in its third acquisition in less than a month.

PGG Wrightson, which is controlled by China's Agria, said it had gained "state-wide coverage of the grains industry" in New South Wales, Australia's second-ranked cereals-growing state, with the purchase of Grainland Moree.

Grainland represents "a favourable entry point into the highly productive cropping market of north western New South Wales", said Mark Dewdney, chief executive of PGG Wrightson, which is also known as PGW.

While likely a relatively small deal – PGW failed to disclose the sum paid – the acquisition highlighted an appetite for deals in stark contrast to the group's austerity strategy in the years after the global financial crisis, to which the company was particularly exposed thanks to a previous takeover spree,

Global ambitions

Indeed, Alan Lai, the chairman of both Agria and PGW said that the Grainland deal "represents another step in Agria and PGW's collective efforts to execute on a global growth strategy… and further internationalise our operations".

The transaction comes only two weeks after PGW unveiled the acquisition of a 50% stake in Uruguayan rural services company Agrocentro Uruguay, a deal Mr Lai said reflected a drive "to expand Agria's global footprint in high-growth markets such as South America".

Meanwhile, late last month, PGW, which has also upgraded profits hopes, revealed the purchase of a New Zealand turf irrigation business from Advanced Irrigation Systems.

Agria last month appointed as an executive director Brent de Jong, a former JP Morgan adviser on deals in emerging markets in Africa, Europe and the Middle East.

The group said that Mr de John's experience in mergers and acquisitions and investment banking "will be valuable as he works closely with Agria's executive team to evaluate growth and expansion opportunities".

Bigger deals

PGW was formed in 2005 with the merger of Pyne Gould Guinness and Wrightson in a deal led by Craig Norgate, a former chief executive of New Zealand dairy giant Fonterra.

However, PGW was ill positioned for the global financial crisis after making large land acquisitions in Uruguay, for the Farming Systems Uruguay dairy operation now owned by Singapore's Olam International.

PGW also made an ill-fated NZ$220m investment in meat processor and exporter Silver Fern Farms.


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