Paris/Winnipeg | Reuters — Global commodity trader Louis Dreyfus has agreed to sell its fertilizer business to Canada’s Agrium as it continues an overhaul in response to tough agricultural markets.

Louis Dreyfus is to sell Macrofertil Australia, which has annual sales of around US$120 million, to Agrium’s Australian unit Landmark Operations in a deal expected to close in the first quarter of 2018, the companies said on Tuesday.

Financial terms were not disclosed.

Global merchants such as Louis Dreyfus have seen their margins eroded by large crop inventories, low prices and limited volatility, triggering cost-cutting and divestment moves.

The group has said it would seek partners for its fertilizer, metals, juice and dairy activities to focus more on core activities such as grains and oilseeds.

The group earlier this year agreed to sell its African fertilizer distribution business to Helios Investment Partners, and has hired banks to sell a stake in its metals unit.

“This transaction is another step towards the implementation of our strategic roadmap, enabling us to concentrate on businesses with closer ties to product sourcing and strong farmer relationships,” Gonzalo Ramirez Martiarena, Louis Dreyfus’ CEO, said in a statement.

Louis Dreyfus will retain a fertilizer business in South America following the sale of the African and Australian activities.

Macrofertil Australia, whose network includes six fertilizer storage and distribution assets, has annual volumes of over 300,000 tonnes.

Agrium said in a separate statement the acquisition would complement its existing network of around 400 sites in Australia.

The deal comes as Agrium is preparing to merge by the end of the year with PotashCorp to form Nutrien, a transaction valued at US$25 billion.

The downturn in crop markets has encouraged a wave of consolidation among firms that supply crop chemicals and seeds to farmers.

— Reporting for Reuters by Gus Trompiz in Paris and Rod Nickel in Winnipeg.