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Fauji Fertilizer Plans Acquisition of Agritech Limited Shares

AgriTech Chemicals and Fertilizers

Fauji Fertilizer Eyes Agritech Limited Shares for Strategic Growth.

Business Honor
11 September, 2024

Fertilizer giants to create synergies through acquisition of Agritech's shares and control

Fauji Fertilizer Company, one of the biggest fertilizer producers of Pakistan, has agreed to acquire shares and management control from Agritech Limited, producer of urea and granulated single super phosphate fertilizer. The news was disseminated in a notice published by Agritech Limited at PSX on Wednesday.

FFC aims to acquire more than the minimum amount of shares, which the company is entitled to acquire under Section 111 of the Securities Act, 2015. IEL is appointed as a manager by the company for conducting the issue. Being listed on the PSX, FFC holds a majority stake through FF, with 44.35%, being the largest shareholder being Fauji Foundation (FF).

Agritech has 424,645,119 shares with massive production capabilities of 433,000 tons for urea and 81,000 tons per annum for SSP. Experts from the industry, including JS Global Securities, believe that probable acquisition will create synergies to increase the value of a combined entity in the fertilizer and chemicals market.

The industry leader, FFC, has witnessed very strong financial growth, as its profit-after-tax has increased to Rs25.01 billion for the quarter ended June 30, 2024, more than double its Rs12.44 billion profit for the same period the previous year.

Both companies are in different fields. They include fertilizer manufacturing, chemicals, energy generation, cement, and food processing as a basis for potential expansion and consolidation. The acquisition completed will strengthen FFC's position in the sector and allow long-term strategic benefits to be realized.