PGG’s seed sale after strategic review

PGG Wrightson intends selling its seed and grain business to Denmarkbased DLF Seeds for $421 million.

The transaction — which was subject to standard completion adjustments — arose from a strategic review conducted by PGW in recent months, deputy chairman Trevor Burt said.

‘‘PGW received expressions of interest from a number of parties internationally wanting to pursue a transaction involving the seed and grain business.

‘‘The DLF Seeds offer was particularly compelling in terms of the value it would deliver to PGW shareholders,’’ he said in a statement.

Chief executive Ian Glasson said the agreement provided for an ongoing close working relationship between PGW and PGW Seeds.

DLF Seeds chief executive Truels Damsgaard said it was an important transaction for the company which had long viewed PGW as a strategic and complementary business to its current operations.

‘‘The transaction presents a real opportunity for value creation as a combined business with a strong global offering for our customers,’’ he said.

Additionally, DLF Seeds would assume or repay PGW Seeds’ net debt outstanding, as at June 30, of about $18 million.

DLF Seeds was established in 1872. It is owned by DLF AmbA, a cooperative owned by about 3000 Danish seed growers.

It operated within forage and turf seed, sugar and fodder beet seed, seed potatoes and multiplication of vegetable seed, and was active in more than 80 countries.

Its vertically integrated operations had 1200 employees, 12% of them involved in research and development.

A PGG Wrightson will announce its fullyear financial result on August 14.

PGG shares last traded at 69c, up 7.81%.