Argentina-based multinational corporation, along with two major agribusiness companies, successfully acquire half of the largest fertilizer manufacturer's stake
Argentine Fertilizer Industry Undergoes Significant Shift
In a move that marked one of the largest transactions of the year in Argentina, the Canadian company Nutrien has exited its stake in Profertil, the country's largest fertilizer producer. The sale was acquired by two locally-based companies: Adecoagro and the Association of Argentine Cooperatives (ACA).
The change occurred at a time of high fertilizer demand, driven by the need to increase agricultural productivity. Profertil, located in Bahía Blanca, Buenos Aires Province, plays a central role in Argentina's productive scheme, supplying a large part of the country's urea demand and exporting part of its production. The company specializes in the production of granulated urea, a key input for Argentine agriculture.
YPF, the state-owned oil company, retained its 50% participation in Profertil, contributing infrastructure and access to natural gas as key inputs for urea production. This ensures that the business remains with state participation, while the partner now consists of companies with Argentine capital.
Adecoagro, a company that develops agricultural, industrial, and energy activities in Argentina, Brazil, and Uruguay, expanded its presence in a business directly linked to its main activity: agriculture. The acquisition of part of Profertil strengthens Adecoagro's position in the agricultural value chain, providing it with access to a central input for its associates.
The Association of Argentine Cooperatives (ACA), a key player in the livestock sector, brought over 140 cooperatives and thousands of associated producers into the mix. This move aims to secure provision for Argentine producers in the context of market fluctuations.
In recent years, the application of urea has become a widespread practice in cereal production, particularly wheat and corn. The ACA's participation in Profertil allows it to support its members in meeting their fertilizer needs, contributing to the overall growth and sustainability of the agricultural sector.
The transaction placed among the most significant of the year, with Adecoagro and ACA injecting USD 600 million into the acquisition. This investment underscores the importance of Profertil to the Argentine agricultural industry and the commitment of the new owners to its continued success.
The acquisition of Nutrien's 50% stake and the entry of Adecoagro and ACA into the Argentine fertilizer industry marks a significant shift in the industry's ownership structure. This change is expected to bring about new opportunities for growth and development, particularly in the context of ongoing market fluctuations.
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