Chapman Tripp Advises PGG Wrightson on $421m Deal

7 August 2018

Chapman Tripp is advising PGG Wrightson (PGW) on its latest deal to sell its seed and grain business to leading global seeds group DLF Seeds for $421 million, announced yesterday [6 August].

The deal is conditional on, amongst other things, obtaining approvals from PGW’s shareholders, the Overseas Investment Office, the Commerce Commission and the Australian Competition and Consumer Commission.

“PGW received expressions of interest internationally from a number of parties interested in its seeds business. The deal was complex, because it involved negotiating the sale of a business that spans across New Zealand, Australia and South America, while also negotiating the long-term commercial relationship between PGW and the seed and grain business that will take effect following settlement,” partner John Strowger said.

Chapman Tripp partners John Strowger and Joshua Pringle and solicitor Tom Jemson acted on corporate aspects of the deal. Chapman Tripp’s team also included:

• partner and chair of the board, Andrew Woods, and senior associate Ben Warden, who advised on the ongoing commercial relationship between PGW and the seed and grain business;
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• partner Lucy Cooper, who advised on the competition law aspects of the transaction.
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PGW’s Deputy Chairman Trevor Burt said the deal with DLF Seeds represented excellent value for PGW, but also enabled the seed and grain business to benefit from being part of an impressive global seeds operation.

DLF Seeds is co-operatively owned by about 3000 Danish grass seed farmers, and describes itself as “the global market leader providing grass and clover seeds to more than 80 countries”.

The deal is important for PGW and its shareholders. Pending the outcome of PGW’s ongoing strategic review, the PGW Board could determine to make a potentially non-taxable distribution of available subscribed capital to shareholders of up to NZ$292 million (subject to obtaining a favourable binding ruling from Inland Revenue).

The deal is one of many that Chapman Tripp has acted on in 2018, with the firm making both the Mergermarket’s H1 2018 M&A league tables – the only New Zealand firm – and taking out the top spot for New Zealand in the Thomson & Reuters First Half 2018 M&A Review. Chapman Tripp was also the leading New Zealand firm by deal count and deal volume in “Bloomberg’s 1H 2018 M&A Legal Rankings” in Australasia.

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