17 Aug 2010

NZ Farming Systems reaches deal over contract

11:40 am on 17 August 2010

New Zealand Farming Systems Uruguay, which is the subject of rival takeover bids, has agreed to pay PGG Wrightson $4 million to cancel its management contract.

The two companies have been in negotiations for weeks and the final deal is subject to bank and investor approval.

While the management contract will end, the pair have signed a new contract giving PGG Wrightson preferred supplier status until at least 2019 and consultation from PGW's senior management in Uruguay until 2015.

The chairman of NZ Farming Systems, John Parker, says the company is in the process of appointing a chief executive in Uruguay.

Uruguayan agricultural company Union Agriculture Group launched a bid this week for the company in competition with an offer from Singapore-based Olam International.