Adecoagro's $600M Bid to Reshape South America's Food Supply Chain

LUXEMBOURG – December 01, 2025

In a strategic move poised to create a new agricultural powerhouse in South America, sustainable production leader Adecoagro S.A. has submitted a binding offer to acquire the remaining 50% of Profertil S.A. from Argentina's state-controlled oil company, YPF. The approximately US$600 million deal for South America's largest granular urea producer is more than a simple corporate acquisition; it represents a calculated play to vertically integrate and control a foundational piece of the continent's food production infrastructure.

This offer follows a previous agreement for Adecoagro to acquire the other 50% stake from Canadian fertilizer giant Nutrien. Upon completion, which is expected by the end of this month pending YPF board approval, Adecoagro will command a 90% controlling interest in Profertil, with the remaining 10% held by the Asociación de Cooperativas Argentinas (ACA), a key association representing roughly 50,000 farmers. The move signals a profound shift in the agricultural landscape, consolidating control over a critical input—fertilizer—within a single, powerful entity.

Forging a Vertically Integrated Agri-Giant

For Adecoagro, which owns over 210,000 hectares of farmland across Argentina, Brazil, and Uruguay, the acquisition is the capstone of a long-term strategy. By bringing Profertil into its fold, the company moves beyond being just a producer of crops and renewable energy to become a master of its own supply chain. This vertical integration provides a powerful hedge against the volatile global market for agricultural inputs, securing a stable, low-cost supply of fertilizer for its own vast operations and for the broader regional market.

Mariano Bosch, Co-Founder and CEO of Adecoagro, framed the transaction as a "significant milestone" that enhances the company's scale and diversifies its portfolio. "The acquisition of Profertil positions Adecoagro as a key supplier to the regional agricultural sector, integrating a business with robust fundamentals and consistent cash generation," Bosch stated. This isn't just about diversification; it's about building resilience. In an era defined by supply chain disruptions, controlling the means of production—from the soil nutrients up—is the ultimate competitive advantage.

The strategic value is further underscored by the support from Adecoagro's principal shareholder, Tether. Juan Sartori, Chairman of Adecoagro's Board, added, "Profertil is a best-in-class company, essential to Argentina and South America's agricultural production chain, and we believe its integration will significantly enhance Adecoagro's platform." This integration is designed to create a self-reinforcing ecosystem where agricultural output and input manufacturing are managed under one roof, maximizing efficiency and market power.

The Hidden Engine: Argentina's Natural Gas Advantage

At the heart of Profertil's formidable valuation and strategic importance lies a crucial piece of national infrastructure: Argentina's natural gas reserves. Profertil's state-of-the-art industrial complex is strategically located in Bahía Blanca, the country's most important petrochemical hub. This provides direct and privileged access to competitively priced natural gas, the primary feedstock for producing ammonia and urea. This energy advantage is the secret sauce that makes Profertil a low-cost producer on a global scale.

The numbers speak for themselves. Profertil generated an impressive average annual EBITDA of approximately US$390 million between 2020 and 2024, a figure that dwarfs Adecoagro's own recent earnings. This robust cash generation, coupled with a fully dollarized revenue stream from exports, makes it a uniquely stable and lucrative asset in Argentina's often-turbulent economic environment. For Adecoagro, acquiring Profertil is not just buying a fertilizer plant; it's buying a direct stake in Argentina's capacity to convert its natural resource wealth into high-value industrial products.

This connection between energy infrastructure and agricultural output is a core component of building a resilient national economy. As cities across the continent grow, the ability to reliably feed urban populations depends on this kind of industrial synergy. The deal highlights how a nation's energy policy and its infrastructure for resource extraction are directly linked to its food security and its position in the global trade network.

Securing the Future of Food

With an annual capacity of 1.3 million metric tons of urea, Profertil already supplies approximately 60% of Argentina's domestic consumption. Adecoagro's consolidation of this asset has profound implications for the nation's farmers and its long-term food security strategy. On one hand, having a powerful, locally-focused owner could ensure a more stable and predictable supply of fertilizer, shielding farmers from the whims of international markets. The involvement of the farmers' cooperative ACA as a minority shareholder provides a voice for agricultural producers at the table.

However, such significant market concentration will undoubtedly attract scrutiny from regulatory bodies like Argentina's Comisión Nacional de Defensa de la Competencia (CNDC). Ensuring that this new agri-giant does not leverage its market dominance to the detriment of smaller, independent farmers will be a critical test for regulators. The deal effectively transforms a key input from a commodity traded between multiple players into an asset controlled by the region's largest integrated producer.

The transaction is being financed through a combination of cash, a new long-term credit facility, and proceeds from an equity sale, for which Adecoagro has already filed a US$500 million shelf registration. This financial architecture underscores the company's commitment to finalizing the deal and integrating Profertil's operations swiftly. As both Nutrien and YPF execute their respective strategies to divest non-core assets, Adecoagro is seizing a rare opportunity to fundamentally alter the structure of South America's agricultural industry. The approval from YPF’s board now stands as the final gatekeeper to a transaction that could redefine the agricultural landscape of an entire continent.