Germany's second largest sugar refiner Nordzucker said on Friday it had agreed to purchase 70% of Australia's Mackay Sugar Limited, giving it access to Australian and wider Southeast Asian markets.
Nordzucker said in November it was in talks to buy Mackay as part of the German company's international expansion.
"The growth in sugar is taking place in regions outside the EU," said Nordzucker CEO Lars Gorissen in a statement.
"By acquiring a stake in Mackay Sugar, we can secure a substantial share of the Australian market and gain access to the Southeast Asian market."
Seeking Takeovers
Nordzucker said last year it was seeking takeovers of producers of sugar from cane outside the depressed European sugar market.
Nordzucker will contribute equity capital totalling 60 million Australian dollars (€68.5 million) for the 70% shareholding, Nordzucker said.
Mackay Sugar will also receive an additional loan of up to 60 million Australian dollars.
'Production Capacities Outside Europe'
"Nordzucker is so building up production capacities outside Europe and consistently pursuing its strategy of focusing on sugar production from sugar beet and sugar cane," the company added.
The transaction is subject to the approval of Mackay Sugar's shareholders, mainly sugar farmers.
The deal involves three of Mackay's four factories producing around 700,000 tonnes of raw sugar annually for both the Australian market and exports.
"The equity and debt capital contribution will mainly be used for maintenance and capital expenditures in order to significantly increase the availability of the three remaining plants […] over the next few years and make the company sustainably profitable," Nordzucker added.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
