FEED compounders ForFarmers and 2 Agriculture have announced a joint venture in the UK.
The two firms have agreed to merge businesses to serve a wider customer base with a combined production capacity of more than three million tonnes of compound feed a year.
The mutual agreement to enter into a joint venture meets the strategic objectives of both partners, a statement about the merger said.
ForFarmers UK will strengthen its poultry sector position and gain efficiencies, the statement explained.
And 2Agriculture will benefit from shared investment opportunities across a larger volume, increased geographic spread of manufacturing sites and exposure to other species markets.
The deal will be subject to approval from UK competition authorities.
Steven Read, managing director of ForFarmers UK and nominated MD of the intended joint venture said: “We are excited to announce the merger with 2Agriculture, which will bring benefits to customers and supply chains in all sectors.
“Together, we can meet the changing requirements from customers and society through our strength in innovation and feed concepts.
“At the same time, we have the opportunity to create further value for our customers across all species by constantly driving improvements and optimising our service in the most efficient manner.
“We look forward to working with colleagues at 2Agriculture to make this happen”.
Kevin Sketcher, Managing Director of 2Agriculture and nominated Board member of the intended joint venture added: “We look forward to joining forces with ForFarmers, a company that is also very focused on delivering quality feed and good advice to customers to enable them to realise sustainable and enhanced returns on farm.
“We see the anticipated joint venture as a good strategic step forward for both parties. We will be able to give our combined customer base across all species value for money by providing them with sustainable high-quality feed.
“Moreover, we will be well positioned to support the agricultural sector offering food security to UK consumers.”
The merger agreement is a non-cash transaction. The share split will be 50.1% for ForFarmers UK and 49.9% for 2Agriculture. This is based on the current enterprise value of both joint venture partners, and takes into account the respective expectations for 2022 and beyond, the companies said.