Adecoagro S.A. Expands with Strategic Acquisition of Profertil S.A. for $600 Million

Adecoagro Advances in Agricultural Sector with Strategic Acquisition of Profertil S.A.

Adecoagro S.A. announces a significant step in its growth strategy by submitting a binding offer to acquire YPF's 50% stake in Profertil S.A., the largest producer of granular urea in South America, for approximately US$600 million. This acquisition, pending approval from YPF's Board of Directors, is set to enhance Adecoagro’s operational footprint in the agricultural sector. With this deal, Adecoagro aims to consolidate its control over 90% of Profertil’s share capital, with the remaining 10% held by Asociación de Cooperativas Argentinas. This move aligns with Adecoagro's long-term strategy to diversify its portfolio and solidify its position as a key player in the regional agricultural market.

Profertil is recognized for its efficient production capabilities, boasting an annual capacity of 1.3 million metric tons of urea and 790 thousand metric tons of ammonia. The company supplies about 60% of Argentina's urea consumption, making it a critical component of the agricultural supply chain. Mariano Bosch, CEO of Adecoagro, emphasizes that acquiring Profertil represents a pivotal milestone that will leverage Argentina's competitive advantages, particularly with Profertil’s strategic location in Bahía Blanca, which facilitates access to competitively priced natural gas and electricity. By enhancing its operational efficiency, Adecoagro aims to drive long-term performance and sustainability within the agricultural sector.

The financial structure for this acquisition will be a mix of cash reserves, a new long-term credit facility, and equity sales, demonstrating Adecoagro's commitment to maintaining a robust capital position. Juan Sartori, Chairman of Adecoagro's Board, highlights the company's focus on high-quality, low-cost production, reinforcing its growth trajectory. This acquisition not only positions Adecoagro as a key supplier in the agricultural sector but also showcases its dedication to sustainable agricultural practices and operational excellence.

In a related development, Adecoagro has filed a shelf registration statement with the SEC to offer and sell up to $500 million in common shares. This move aims to bolster its capital access, although the company clarifies that it is not obligated to sell any specific amount of securities at this time. This registration underscores Adecoagro's proactive approach to securing its financial needs while navigating market conditions.

Overall, Adecoagro’s strategic acquisition of Profertil and its efforts to access capital markets reflect a robust commitment to growth and sustainability in the agricultural industry, positioning the company favorably for future opportunities.