The European Commission has cleared the acquisition of the Austrian fertilizer factory Borealis by the Czech Agrofert group, which is part of the trust fund of former Prime Minister Andrej Babis. This decision will strengthen Agrofert's position in the European fertilizer industry.
The European Commission has concluded that the acquisition does not jeopardize competition in the EU, it said in a statement Monday. There were protests from Austrian farmers against the planned purchase.
Originally, the fertilizer division was to go to the Russian group EuroChem for 455 million euros. However, due to the sanctions against Russia, this plan was deviated from and Agrofert was awarded the contract in a new tender.
The acquisition of Borealis by Agrofert is an important step in Agrofert's strategy to become the leading fertilizer producer in Central Europe. The deal is not uncontroversial, however, as Babis, the founder and former owner of Agrofert, is currently under fire for alleged conflicts of interest.
The approval of the acquisition comes at a time when the European agricultural sector is facing increasing pressure to become less dependent on fertilizer imports and develop its own industry. This is partly due to the Western sanctions against Russia, which also lead to problems with the Russian export of fertilizer to EU countries.
Several agriculture ministers stressed last Monday that the EU countries should be less dependent on imports for fertilizer and should have their own industry. Others, on the other hand, say that agriculture should use much less chemical agents and that legislation is already being prepared.
Some even argue that chemicals are 'old-fashioned' and that alternative solutions must be found. They argue that industry consolidation is necessary to strengthen the European fertilizer industry, as there are also opportunities to reduce fertilizer dependence through the development of alternative methods of soil improvement and fertilization.