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Monday / December 9. 2024

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HomePosts Tagged "President and Chief Executive Officer."
Agribusiness, Finance, Foodgrains, North America, Trade

The divestiture of Grain & Protein supports AGCO’s strategic transformation, recently accelerated by the PTx Trimble joint venture, which closed in April 2024.

AGCO Corporation, a global leader in the design, manufacture and distribution of agricultural machinery and precision ag technology, announced it has entered into a definitive agreement to sell the majority of its Grain & Protein business to American Industrial Partners (“AIP”) in an all-cash transaction valued at $700 million, subject to working capital and other customary closing adjustments.

“The divestiture of Grain & Protein supports AGCO’s strategic transformation, recently accelerated by the PTx Trimble joint venture, which closed in April 2024,” said Eric Hansotia, AGCO’s Chairman, President and Chief Executive Officer. “Divesting this business allows us to streamline and sharpen our focus on AGCO’s portfolio of award-winning agricultural machinery and precision ag technology products, which underpins a long-term focus on high growth, high margin and high free cash flow generating businesses.”

“AIP has extensive experience in the industrial sector and vast carve-out expertise, which we believe will unlock new potential for the Grain & Protein business. We believe the move will help ensure its brands continue to lead the market in grain, seed and protein production equipment and remain well-positioned to deliver for farmers,” added Hansotia.

AGCO expects to use the net proceeds from the transaction consistent with its stated capital allocation priorities, including debt repayment, disciplined investment in technology and organic growth initiatives and return of capital to shareholders.

The transaction perimeter to be sold includes the five primary Grain & Protein brands – GSI®, Automated Production® (AP), Cumberland®, Cimbria® and Tecno®. The transaction perimeter to be sold excludes AGCO’s Grain & Protein business in China.

AGCO will begin reporting Grain & Protein as held for sale in the company’s consolidated financial statements for the second quarter of 2024 through the closing date. The company expects to incur a loss on the sale of the business in the range of $450 million to $475 million.

The transaction purchase price implies a transaction multiple of approximately 8.3x based on Grain & Protein’s trailing twelve months adjusted EBITDA as of March 31, 2024.

The transaction is anticipated to close before the end of the year, subject to regulatory approvals and other customary closing conditions.

Morgan Stanley & Co. LLC and Rabo Securities USA, Inc. are acting as financial advisors to AGCO. Simpson Thacher & Bartlett LLP is acting as legal advisor to AGCO. Santander Corporate & Investment Banking is acting as financial advisor to AIP and is leading the fully committed debt financing. Sidley Austin LLP is acting as legal counsel to AIP.

The divestiture of Grain & Protein supports

Agribusiness, Agro chems – Fertilizers, Company News, Europe, Finance

Total deliveries up 12 per cent with European deliveries up 37 per cent from Q1 FY23.

Yara reported first-quarter EBITDA1 at USD 435 million compared to USD 487 million in first quarter 2023. Net income was USD 16 million (USD 0.07 per share) compared with USD 105 (USD 0.41 per share) a year earlier.

First-quarter 2024 highlights:

  • EBITDA1 down 11 per cent from 1Q23 mainly due to lower prices
  • Total deliveries up 12 per cent with European deliveries up 37 per cent from 1Q23
  • Reduced GHG emission intensity with implementation of key projects
  • Healthy demand growth and limited capacity additions indicate tightening supply-demand balance longer term

“This quarter’s results are down from same quarter last year as increased deliveries are offset by lower prices. Meanwhile, I am pleased to see that our efforts to decarbonize is yielding results. This is crucial to future-proof our business and be able to meet growing demand for low-carbon solutions”, said Svein Tore Holsether, President and Chief Executive Officer.

Despite strong urea supply in 2023, prices are generally demand-driven with positive production margins for even swing producers. With farmer incentives at normal levels and 10-year consumption growth trending at 1.9 per cent per annum, demand fundamentals are supportive for upcoming seasons. While the peak of new capacity additions is now behind us, urea supply is currently strong primarily due to increased production in India and China. However, industry consultant projections show significantly lower supply growth from 2024 onwards. Combined with strong demand fundamentals, this indicates a tightening supply-demand balance longer term.

“Total nitrogen imports to Europe are declining as European production is ramping up. However, Russian urea imports to Europe reached an all-time high last season and currently account for almost one third of total urea imports to the EU. While raw material sanctions and price pressure is taking a double toll on European industry, Russia is gaining market influence. That not only endangers European industry and the green transition, but it also makes European food production more vulnerable,” said Holsether.

The energy transition, climate crisis, and food security remain top priorities globally. With its leading food solutions and ammonia positions, Yara is uniquely positioned to drive these transformations. Yara’s strategy is focused on further strengthening operational resilience and flexibility, and profitable growth in low-carbon solutions. This will support the transformation of the global food system, generate long-term growth opportunities, and drive progress towards Yara’s ambition of growing a nature-positive food future.

Total deliveries up 12 per cent with