Louis Dreyfus Gets FIRB Approval for Namoi Cotton Takeover Bid
(Bloomberg) -- Louis Dreyfus Co. says it got approval from Australia’s Foreign Investment Review Board for its proposed takeover of Namoi Cotton Ltd. after the crop trader agreed to measures that would allay competition concerns.
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Written approval was provided by the review board, which has no objections to the takeover, Louis Dreyfus Managing Director for Australia Tony Geitz said in a statement on Wednesday. The offer for Namoi Cotton, which closes on Sept. 13, is now unconditional, according to Geitz.
Louis Dreyfus and rival trader Olam Agri Holdings Ltd. have been jostling to buy Namoi Cotton since January, and both bids have raised competition concerns, including a reduction in processing services for some farmers. The three companies collectively own over half of the nation’s 41 gins.
Namoi Cotton has previously recommended the Olam Agri offer that values the company at around A$144 million ($97 million) to its shareholders. The Louis Dreyfus bid is marginally lower at about A$138 million, but the trader already has a 20% stake in the Australian company.
Calls and an email to Namoi Cotton went unanswered. Olam Agri didn’t immediately respond to a request for comment.
The Australian Consumer and Competition Commission said last month that it wouldn’t oppose the Louis Dreyfus bid after the trader agreed to sell its 20% stake in ProClass Pty Ltd. — a cotton lint classing service — and terminate its joint venture with WANT Cotton Pty Ltd.
The ACCC continues to assess the Olam Agri bid.
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