Fertiglobe to Acquire Wengfu Australia’s Distribution Assets

Fertiglobe, the world’s largest seaborne exporter of urea and net ammonia combined, the largest nitrogen fertilizer producer in the Middle East and North Africa (MENA) region, and ADNOC’s low-carbon ammonia platform, said that it has signed an agreement to acquire the distribution assets of Wengfu Australia Pty Ltd, a leading fertiliser distribution business.

The purchase price will be based on the net asset value, consisting of fully recoverable net working capital and liquid inventory, plus a premium of $8 million. The transaction is expected to be earnings per share accretive, Fertiglobe said in a regulatory disclosure with Abu Dhabi Securities Exchange (ADX) on Monday.  

Wengfu operates in South-East Australia from five ports with eight warehouses, distributing 700-800 kilo tonnes of fertilisers annually, to over 200 customers, with capacity to scale up to 1.1 million tons per annum.

This makes Wengfu a leading supplier in one of the world’s fastest-growing agricultural markets, known for high quality standards and a well-established supply chain. Wengfu’s experienced team and longstanding customer relationships will further support the business’s future growth and continuity.  

Expanding Footprint

This acquisition aligns with the company’s strategy to expand its presence in key strategic sectors, diversify its global footprint, and build resilience against seasonality. It provides access to a broader customer base, unlocks supply chain efficiencies, and supports the introduction of enhanced-efficiency and sustainable fertilisers.

This acquisition also enables Fertiglobe to widen its distributed product portfolio to non-nitrogen fertilisers and allows it to expand fertiliser sourcing flexibility to supply the wider Asia-Pacific region and the transaction is subject to customary regulatory and legal approvals.  

Fertiglobe CEO Ahmed El-Hoshy said that acquiring Wengfu’s assets mark a strategic step in their value-driven growth strategy and accelerates the company’s commercial footprint in Australia – one of the world’s fastest-growing agricultural regions.

The acquisition also provides the company with a strong distribution platform across the Asia-Pacific region, strengthens access to its customers, and enhances ability to competitively source and deliver their products and services, he noted.

“Having known Wengfu’s team for several years, we have strong confidence in their ability to grow the business from here. The transaction is in line with our ambitions to expand our presence in key

markets and reinforces our leadership position in the global nitrogen industry,” he added.

The acquisition will be financed through pre-arranged trade facilities, with no impact on Fertiglobe’s dividend distribution capability and minimal impact on leverage. Fertiglobe’s shareholders recently approved second half of 2024 dividends of $125 million, taking total 2024 dividends to $275 million, implying an industry leading yield of +5%.