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Australian rural services group Elders (ASX: ELD) has today wrapped up its $475 million acquisition of Delta Agribusiness after last month securing the competition regulator’s approval for the deal to proceed.
The acquisition has been finalised a year after Elders announced plans to acquire Delta, a Young-based business that operates a network of 68 locations and 40 independent wholesaler customers nationally delivering about $53 million in annual revenue.
The Australian Competition and Consumer Commission (ACCC) raised concerns about the acquisition earlier this year, largely its potential to lead to higher prices for goods and services to Australian farmers.
However, following its investigation the ACCC announced last month it would not oppose the deal providing six Delta branches in Western Australia are divested by Elders.
The branches are located in Dalwallinu, Kalannie, Albany, Manypeaks, Wellstead and Hyden.
“Elders has a proven track record of synergy generation through backward integration,” says Elders CEO Mark Allison following today’s settlement of the acquisition.
“We expect that the acquisition of Delta will create meaningful value for Elders’ shareholders.
“Delta provides us with greater exposure to key local retail markets as well as a leading agronomy and farm advisory team to complement and extend our products and services range for rural and regional Australia. We welcome Delta’s management and employees to Elders.”
Under the terms of the deal, Elders paid Delta shareholders $292 million in cash and issued 22.3 million new Elders shares to complete the transaction.
Delta shareholders have emerged with a 10.5 per cent stake of Elders following the deal.
When announcing the ACCC’s approval last month, Elders revealed that Delta’s FY25 performance was negatively impacted by lower retail sales due to dry conditions in southern Australia and a later start to the cropping season.
Margins were also impacted by heightened competitive pricing resulting from the later season and from crop protection traders who were looking to avoid carry-over inventory.
Despite this, Elders said at the time that the outlook for Delta remained in line with assumptions that underpinned the acquisition rationale.
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