CORRECT: Wrightson cleared to sell seeds business
(Fixes size of gain in 5th paragraph in story that ran on Wednesday, Feb. 13)
By Gavin Evans
Feb. 13 (BusinessDesk) - PGG Wrightson has been cleared to sell its seeds business to Denmark's DLF Seeds.
The Commerce Commission said the $434 million transaction, announced in August, was unlikely to substantially reduce competition in any of the markets it assessed.
“DLF is not at present a close competitor of PGG Wrightson Seeds in respect of ryegrass seeds containing endophytes and is unlikely to be so in the future,” deputy chair Sue Begg said.
“Further, the merged entity would continue to be constrained by Barenbrug Agriseeds, and a number of smaller competitors.”
Wrightson expected to book a gain of about $120 million on the deal and signalled to investors it could return up to $292 million to shareholders on completion, either through a buy-back or a share cancellation.
The proposal won almost 97 percent support at a special meeting in October. The New Zealand Shareholders' Association opposed the transaction, saying the short-term gain for investors was offset by the remaining Wrightson operation being half the size and inferior to the seeds unit.