LOUIS Dreyfus Company is in the process of integrating Namoi Cotton into its Australian operations after completing its full acquisition of the company’s shares in late 2024.

The Australian arm of the global agribusiness is also making progress in meeting the requirements of a court-enforceable undertaking, which led the Australian Competition and Consumer Commission not to oppose the acquisition.

As part of the undertaking, LDC committed to divesting its share in the ProClass cotton-classing business, and ending its joint venture with Northern Cotton gin owners, WANT Cotton.

In October, LDC looked likely to take control of Namoi after the company’s board and largest shareholder Samuel Terry Asset Management announced plans to sell their shares to the agribusiness.

Shortly after, rival bidder and Singaporean agribusiness Olam Agri withdrew its competing offer, signalling its exit from the battle for control of Namoi.

In its full-year financial results to December 31 released earlier this month, LDC confirmed it had acquired all remaining shares, with the purchase price of the transaction amounting to $137 million.

The transaction included a total of 10 cotton gins in New South Wales and southern Queensland with a combined annual ginning capacity of 1.6 million bales, and a network of origination and logistics operations across major growing regions, including three warehouse facilities with a combined static capacity of 500,000 bales.

The acquisition granted LDC full control of the Namoi Cotton Marketing Alliance and Namoi Cotton Alliance, both previously operated as joint ventures with Namoi Cotton.

“[T]he acquisition opens new channels for origination with growers and marks a significant milestone in LDC’s 111-year history in Australia, the world’s sixth-largest producer of cotton,” the report said.

In its financial results, LDC also commented that the acquisition would “support the origination operations” of the “recently created pulses business and our thriving grains business in the country, helping us to meet growing global demand for these products”.

Merging operations

Ahead of its Namoi takeover, LDC operated gins at Emerald and Dalby in Qld and Moree in NSW, as well as warehousing and logistics facilities in Dalby, the Port of Brisbane, and Moree.

In a statement provided to Grain Central, the company said the process to incorporate Namoi’s operations into LDC was under way.

“The process to integrate Namoi Cotton into LDC is under way and day-to-day operations will continue as usual, with no immediate changes expected,” the statement said.

ProClass divestment

LDC has also confirmed it has divested its 20-percent shareholding of ProClass.

This move was part of an undertaking made with the ACCC after the corporate watchdog initially voiced its concerns that the Namoi acquisition would reduce competition in the cotton-classing sector.

Beyond ProClass, the only other classing services in Australia are Namoi-owned Australian Classing Services and Australia Food & Fibre’s in-house operation.

According to ASIC filings accessed in January, LDC held 100,000 B-Class shares of ProClass.

This is half of the available B-Class shares, with the remainder owned by Queensland Cotton Company.

In February, United States-based Gregory Wakefield became a director of the company, to sit alongside ongoing board members Geoffrey Hewitt, Simon Corish and Eliza Starr and secretary John Hurford.

During this period, LDC’s B-Class shares were transferred, with 50,000 going to Swiss-based cotton merchant Paul Reinhart Ag, 25,000 to Leichhardt, NSW-based commodity merchant ECOM Commodities, and 25,000 to Brisbane-based cotton trader Omnicotton Australia.

Northern Cotton gin joint venture

In a statement, LDC said it was unable to comment on its partnership with the Northern Cotton gin “due to confidentially obligations”.

The company had a joint venture with WANT Cotton for the operation and management of the Northern Cotton gin, which began operating in May 2024 near Katherine in the Northern Territory.

The ACCC found that LDC’s acquisition would “substantially lessen competition in the supply of cotton ginning services” in the Northern Territory and Western Australia, given Namoi’s approximately 17pc stake in the Kimberley Cotton Company, which will operate a gin in Kununurra.

In its undertaking, LDC committed to terminate the joint venture agreement.

Grain Central understands that LDC has another year to run on the contract to operate the Northern Cotton gin and will fulfil these obligations.

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