ForFarmers N.V.: ForFarmers and 2Agriculture join forces in the
United Kingdom
Lochem, 1 July 2022
ForFarmers and 2Agriculture join forces in the United
Kingdom
Joint venture well positioned to meet changing demands in agri
and food sector
ForFarmers United Kingdom (ForFarmers UK) and 2Agriculture have
come to an agreement to merge their businesses into a joint venture
to serve a wider customer base. The joint venture will have a
balanced feed portfolio across species, with an expected combined
sales volume of more than 3 million tonnes of compound feed per
year. At the same time the joint venture makes for a robust
business, with improved expertise and presence across species, to
successfully meet the changing demands from the entire value
chain.
The mutual agreement to enter into a joint venture meets the
strategic objectives of both partners. ForFarmers UK strengthens
its position in its home country in the promising poultry sector
and at the same time creates possibilities to make the organisation
more efficient. 2Agriculture benefits from shared investment
opportunities across a larger volume, an increased geographic
spread of manufacturing sites and exposure to other species
markets.
The deal will be subject to approval from the UK competition
authority.
Profiles of Partners in the joint venture
ForFarmers UK, a subsidiary of the Dutch-based ForFarmers N.V.,
is a feed company in the United Kingdom selling approximately 2
million tonnes of compound feed volumes annually (i.e. excluding
volumes of straights and co-products) across species, produced in
14 mills. The majority of feed produced by ForFarmers is for
ruminants and pigs, with smaller volumes being produced for
poultry. The company has approximately 900
employees.
2Agriculture is a UK company that supplies approximately 1.2
million tonnes of feed annually to poultry farmers mostly into the
integrated market, but also to independent customers. The company
employs 250 employees and operates 5 mills located in Scotland,
East Anglia and North Wales and has an extrusion plant in
Cambridgeshire.
Strategic Rationale
The joint venture will bring together 2Agriculture’s expertise
in the promising poultry feed sector with ForFarmers’ capabilities
in research and development as well as in formulation, particularly
in ruminant and pig feeds. In addition, the combined broad
geographic coverage will provide synergy opportunities,
particularly in production and logistics. Similarly, the joint
venture will generate further benefits for its customers by being
able to combine the sourcing of raw materials. Finally, the joint
venture will invest in expansion of the supply chain, enabling
improved transparency around sustainability and the origin and
quality of food.
Steven Read, Managing Director of ForFarmers UK and nominated
Managing Director of the intended joint venture: “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 the colleagues at 2Agriculture to make this
happen”.
Kevin Sketcher, Managing Director of 2Agriculture and nominated
Board member of the intended joint venture: “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. ”
Market characteristics
The total feed market in the United Kingdom is estimated at
approximately 17.5 million tonnes. Expectations per species vary,
with the expectations for the poultry sector at present being the
most positive. The majority of poultry feed produced in the United
Kingdom is manufactured in-house by poultry processors for
integrated use in their supply chains. The United Kingdom is not
fully self-sufficient with respect to production of fresh chicken
(95%) nor of pig meat (60%). Although the pig market is expected to
grow in the mid to longer term, the short-term outlook is that the
market will remain stable due to the destabilised European pig
market as a result of various outbreaks of African swine fever. The
dairy market is self-sufficient and the ruminant sector in general
is expected to grow minimally.
Deal structure
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 share split also reflects the fact that
2Agriculture is fully focused on the promising poultry sector and
has existing supply arrangements in the integrated market.
ForFarmers will consolidate 2Agriculture fully into its financial
results.
You can also read the press release and download a pdf via this
link.
This press release contains information that qualifies as inside
information in the sense of Article 7 paragraph 1 of the EU Market
Abuse Regulation.
Note to the editor / For additional
information:
Caroline Vogelzang, Director Investor RelationsM: 0031 6 10 94
91 61 E: caroline.vogelzang@forfarmers.eu
Kevin Sketcher, Managing Director 2AgricultureE:
kevin.sketcher@2agriculture.com
About ForFarmers N.V. ForFarmers N.V. is
an international organisation that provides complete innovative
feed solutions to the (organic) livestock farming industry. With
its ‘For the Future of Farming’ mission ForFarmers is committed to
the continuity of farming and to a further increasing the
sustainability of the agricultural sector.
ForFarmers is the market leader in Europe with annual sales of
around 10 million tonnes of animal feed. The company is active in
the Netherlands, Belgium, Germany, Poland and the United Kingdom.
ForFarmers has approximately 2,500 employees. In 2021 revenue
amounted to approximately €2.7 billion. ForFarmers N.V. is listed
on Euronext Amsterdam.
ForFarmers N.V., P.O. Box 91, 7240 AB Lochem, T: +31 (0)573 28
88 00, F: +31 (0)573 28 88 99, info@forfarmers.eu,
www.forfarmersgroup.eu
About 2Agriculture2Agriculture is a UK milling
business which has been supplying feed to the poultry industry for
the past 50 years. Over 250 employees work across six sites across
the UK in Scotland, East Anglia, North Wales and Cambridgeshire.
2Agriculture formulates diets to deliver results working in
partnership with poultry farmers and managers to help meet the
production targets for each crop. 2Agriculture aims to be the UK’s
most efficient producer of consistent, high quality feed and to
support its farming partners achieve best cost
production.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements,
including those relating to ForFarmers legal obligations in terms
of capital and liquidity positions in certain specified scenarios.
In addition, forward-looking statements, without limitation, may
include such phrases as “intends to”, "expects“, “takes into
account”, "is aimed at “, ''plans to”, "estimated" and words with a
similar meaning. These statements pertain to or may affect matters
in the future, such as ForFarmers future financial results,
business plans and current strategies. Forward-looking statements
are subject to a number of risks and uncertainties, which may mean
that there could be material differences between actual results and
performance and expected future results or performances that are
implicitly or explicitly included in the forward-looking
statements. Factors that may result in variations on the current
expectations or may contribute to the same include but are not
limited to: developments in legislation, technology, jurisprudence
and regulations, share price fluctuations, legal procedures,
investigations by regulatory bodies, the competitive landscape and
general economic conditions. These and other factors, risks and
uncertainties that may affect any forward-looking statements or the
actual results of ForFarmers, are discussed in the last published
annual report. The forward-looking statements in this press release
are only statements as of the date of this document and ForFarmers
accepts no obligation or responsibility with respect to any changes
made to the forward-looking statements contained in this document,
regardless of whether these pertain to new information, future
events or otherwise, unless ForFarmers is legally obliged to do
so.
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