Farm Ireland
Independent.ie

Monday 21 August 2017

Competition authorities halt Origin Enterprises takeover of Scottish fertiliser company

Ciaran Moran

Ciaran Moran

The UK's competition authorities has found that Origin Enterprises proposed acquisition of Scottish fertiliser company Bunn could reduce competition to supply fertilisers in Scotland.

Under the proposed deal Origin would pay an initial £14.2m to Bunn, but the final value of the transaction is expected to rise to £18.2m.

Bunn is a provider of prescription fertiliser blends and nutrition management systems servicing arable, grassland and horticultural sectors. Origin said at the time that it expected the purchase would yield a return within the first full year of ownership.

The companies must now offer proposals to address these concerns by 21 July or face an in-depth investigation.

Both companies are national blenders and distributors of fertilisers for use in agriculture.

Through its initial investigation, the Competition and Markets Authority (CMA) has found that Origin and Bunn are two of the three main suppliers of fertilisers in the central/eastern region of Scotland, supplying farmers and farmers’ merchants from their sites in Montrose.

The CMA is concerned that bringing the two firms together could see prices rise for customers or result in a reduction in the choice of fertilisers available.

The CMA found that there were sufficient alternative suppliers in other areas of Great Britain. The merger will be referred for an in-depth investigation by an independent group of CMA panel members unless Origin can offer undertakings by 21 July which sufficiently address the CMA’s competition concerns.


Origin Enterprises, the Dublin-headquartered agri-services group, has recorded underlying revenue growth of 4.1pc in the three months to April 30, according to its latest trading update.

n monetary terms, revenue during the three months to April 30 was €548.7m, €6.8m lower year-on-year, which the group said was due to the weaker sterling versus the euro.

The company said that it has achieved higher underlying revenues and margins in the seasonally important third quarter of the financial year from robust activity levels on-farm.

Origin said that generally settled weather throughout the first nine months of the financial year combined with an improved short term planning environment for primary producers has supported higher demand for scientific agricultural services and inputs across the group’s operations.

Read more: Origin Enterprises buys assets of UK company for €21m

The company said that, based upon a good third quarter performance and a normal demand profile for scientific agricultural services and crop input activity in the last three months of its financial year, it expects to achieve full year adjusted diluted earnings per share in the range of 44 to 46 cent per share.

Acquisitions

In March the company, which operates in Ireland, the UK, Poland, Romania, and the Ukraine, announced the acquisition of the digital agricultural services group, the Resterra Group.

Resterra specialises in the delivery of bespoke precision agronomy applications and is a provider of agri-tech services to primary producers, input manufacturers and agri-services companies.

Origin said that the acquisition enhances it’s service capability in existing and wider geographies and supports the group’s wider technology transfer initiatives.

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