Louis Dreyfus Expands Australian Presence With AU$160M Namoi Cotton Acquisition

French agricultural giant Louis Dreyfus Company (LDC) announced Thursday that it bought 93% equity in French Namoi Cotton, Australia's oldest and largest cotton ginning business.

LDC is taking bigger strides toward building a notable presence in the Australian market, with the deal worth approximately AU$160 million.

The acquisition was finalized following a year-long bidding war and a nod by the Australian Competition and Consumer Commission (ACCC).

The deal is a fruition of Naomi's long-time wish for a strategic merger to mend its financial health. However, LDC is going to reap high benefits through the venture, as the merger is expected to improve the company's footing in the global cotton market and create operational synergies, ABC reported.

ACCC had given the merger its seal of approval following a month-long investigation wherein experts also weighed in on a proposal for Singapore's Olam Agri. However, the decision fell in LDC's favor thanks to the revised AU$160 million offer, which was 51% greater than its original plan.

Naomi Cotton now will be a strategic addition to LDC's global cotton empire that spans from Africa to the U.S. Despite making up a very small portion of LDC's activities, Namoi provides access to high-quality fiber close to important manufacturing hubs such as Bangladesh and Vietnam. LDC can also lessen supply interruptions in the northern hemisphere thanks to this acquisition, per Bloomberg.

Robert Antoshak, a fiber and textile consultant with three decades of industry experience, touted the move as a way to "cotton-sourcing options in the Pan-Pacific region at a time when the cotton industry is undergoing significant changes. ... Australian varieties can at times command a premium price."

Following the merger, Namoi's CEO, Tim Watson, expressed confidence in the company's new ownership under LDC.

"We're fully supportive of that process, and we're helping them as much as we can," Watson said.