The long-awaited sale of the Incitec Pivot fertiliser supply division has been confirmed by the fertiliser and explosives giant, Dyno Nobel, as it reported a $7 million profit for the first half of 2024-25.
Ridley Corporation is making a significant move into fertiliser, set to pay about $375 million for Australia’s largest distribution business, the IPF Distribution business. This acquisition marks a strategic diversification for Ridley, known for its stock feed business.
The sale and transfer of ownership are anticipated to be finalized by late September. The deal involves Ridley initially paying $300 million for the IPF Distribution business, which holds a considerable market share in eastern Australia for fertiliser and plant nutrition supply.
In addition, Ridley will later pay a further $75 million for Incitec Pivot’s Geelong fertiliser import and distribution property in Victoria. The Geelong site, historically a fertiliser manufacturing location, is being redeveloped for imports after Incitec announced the cessation of domestic production there.
Incitec Pivot’s president, Scott Bowman, expressed satisfaction with the sale, highlighting the positive impact on employees, customers, and communities. He emphasized that business operations would continue as usual during the transitional period.
Ridley Corporation’s move into the fertiliser sector includes securing urea supply from the Perdaman Chemicals and Fertiliser project in Western Australia. This strategic partnership is expected to enhance Ridley’s market position and provide favorable terms for future urea supplies.
Ridley’s acquisition of the Incitec Pivot business signifies a new growth avenue for the company, strengthening its position as a leading player in Australian agricultural services. The purchase is projected to deliver considerable financial returns and boost earnings per share in the upcoming fiscal year.
Mauro Neves, the managing director of Dyno Nobel, expressed confidence in Ridley’s ability to uphold the Incitec Pivot brand’s legacy. He underscored the synergies between Ridley’s operations and Incitec’s business, marking the beginning of an exciting chapter for both companies.
Ridley’s funding for the acquisition includes a new revolving debt facility with ANZ Banking Group and the issuance of perpetual notes. The company’s strategic expansion into fertiliser aligns with its existing capabilities in commodity risk management and logistics.
The sale of Incitec Pivot’s distribution business aligns with Dyno Nobel’s strategic plan to divest the division. The move reflects a shift in focus for the company, which had previously considered floating the business on the ASX or pursuing a sale.
The completion of the sale to Ridley Corporation represents a milestone for Dyno Nobel, fulfilling its commitment to stakeholders and paving the way for a new era for the Incitec Pivot business. The transaction is expected to bring about positive outcomes for all parties involved.
Industry experts view this acquisition as a significant development in the agribusiness sector, signaling a shift in market dynamics and strategic investments in the fertiliser industry. The deal underscores the importance of diversification and strategic partnerships in driving growth and competitiveness in the agricultural sector.