Fertiglobe to acquire Wengfu Australia assets to scale Asia-Pacific fertilizer reach: Adnoc-owned urea and ammonia producer and exporter Fertiglobe has inked an agreement to acquire the distribution assets of fertilizer supplier Wengfu Australia, according to a press release (pdf).

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The details: The asset sale and purchase agreements will see Fetriglobe pay the net values of the assets, made up of liquid inventory and net working capital, as well as a USD 8 mn premium. Its current normalized working capital is estimated to be USD 75 mn, and will be financed through pre-arranged trade and factoring facilities, with no impact on dividends and minimal effect on leverage.

The timeline: The acquisition is subject to regulatory approvals, but is expected to close soon. It is set to be earnings per share accretive, meaning the earnings per share are expected to increase following the transaction, with a 2.8% uptick expected in 2026 and 4.1% in 2027, before synergies.

What will Fertiglobe gain? Wengfu Australia’s asset portfolio includes eight warehouses spread across five ports, helping to distribute 700-800 kt of fertilizer annually. There is also capacity to scale-up production to 1.1 mn tonnes annually. The acquisition also widens Fertiglobe’s portfolio to non-nitrogen fertilizers, and increases its customer base and sourcing flexibility to the Asia-pacific region. Fertiglobe already supplies around 600 kt of urea to Australia yearly.

Barclays just recently initiated coverage on Fertiglobe, along with other Adnoc firms, with a positive overweight rating,

About Wengfu Australia: Wengfu Australia was established in 2009 and is a subsidiary of China’s Guizhou Phosphate and Chemical Group — the world’s third-largest phosphate fertilizer manufacturer. Wengfu Australia serves over 200 customers across Southeast Australia.

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