Global agriculture firm Louis Dreyfus Company launches takeover bid of Namoi Cotton

Global agriculture firm Louis Dreyfus Company launches takeover bid of Namoi Cotton
  • PublishedDecember 18, 2023

French agricultural giant Louis Dreyfus Company (LDC), which was founded by the actor’s great, great grandfather Leopold Louis-Dreyfus in 1851, owns 17 per cent of Namoi Cotton and recently made an offer to acquire the remaining 83 per cent.

The deal is subject to several clauses and shareholders will vote on the offer next year.

While Julia is likely best known for playing Elaine Benes on Seinfeld, she is also the daughter of billionaire Gerard Louis-Dreyfus, who chaired LDC from 1969 to 2006.

After his death in 2016, Julia paid tribute to her father during an Emmys acceptance speech, but she rarely speaks publicly about the business.

LDC is currently chaired by Margarita Louis-Dreyfus — Julia’s second cousin once removed by marriage.

Man in pink button up shirt standing in front of green trees
Ben Lyons says Louis Dreyfus Company’s takeover bid is not surprising.(Supplied: University of Southern Queensland)

Predictable bid

University of Southern Queensland Rural Economies Centre of Excellence director Ben Lyons said the takeover bid was not surprising.

“It’s really a big business getting bigger,” Mr Lyons said.

“It’s more about getting gaining efficiencies and market share there from a Louis Dreyfus perspective.”

Mr Lyons said a lot of Australian manufacturing had a for

“We export 70 plus per cent of our agriculture, so we need access to global markets and having that foreign investment is not a bad thing,” he said.

“It’s probably a positive.”

He said foreign companies often saw Australian agriculture as a “safe bet”.

“Both legally and in terms of industry output, [compared to] other markets [we’re] relatively stable and predictable, so it’s a pretty safe investment bet, which is a good thing for Australian agriculture,” he said.

Founded in 1962 in Wee Waa, New South Wales, Namoi was listed on the ASX in 1998.

It has 10 processing facilities or gins – short for engines — across major cotton growing areas from southern Queensland to central NSW.

Gins are a vital part of the supply chain.

They receive raw cotton from growers in plastic-wrapped round modules, separate the fibre from the seed, and pack the fibre into rectangular bales, ready for export to textile-manufacturing countries such as China, Indonesia and Thailand.

The removed seed can be used for replanting, livestock feed or crushed for cooking oil.

A man in a blue check shirt standing in front of a brick wall.
Tim Watson will take Louis Dreyfus Company’s takeover bid to shareholders.(Supplied: Namoi Cotton)

Cotton ginner backs deal

Namoi Cotton chair Tim Watson said the board recognised the company was in “good shape” and felt the time was right for the acquisition.

“Namoi has … always been a strong counterparty, and now, teaming up with someone like Louis Dreyfus — that just reinforces the strength of that counterparty and would give you the confidence as a grower to continue to deal with Namoi Cotton long into the future,” Mr Watson said.

LDC is one of the “big four” agricultural commodity trading companies alongside US-based Archer Daniels Midland, Bunge, and Cargill.

It has had a presence in Australia since 1913.

It owns gins at Emerald and Dalby in Queensland and at Moree in NSW.

Brookstead cotton farmer Johannes Roellgen said he could see positives and negatives of the proposal.

“Usually, you’re reasonably locked in to go with a gin that is closest to you, which makes it even more important to have options when it comes to marketing your cotton,” Mr Roellgen said.

“That’s my main concern with seeing Louis Dreyfus and Namoi joining forces — that there is one less marketing option around.

“At the same time … if everything is managed properly, there would be benefits as well in terms of reducing the cost base, which ultimately could and maybe should be reflected in lower ginning costs and maybe lower marketing overheads, as well.”


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