Namoi Cotton shares have soared 25 per cent after it agreed to partner with global commodities company Louis Dreyfus in a deal worth more $34 million.

Under the proposal, Namoi will operate its cotton marketing activities in a joint venture with Louis Dreyfus, to be named Namoi Cotton Alliance.

Namoi will hold a controlling 51 per cent in the joint venture, and will receive $30.4 million from Louis Dreyfus for its 49 per cent stake.

The regional NSW cotton company will also earn $3.65 million by issuing more than 14 million of its shares to Louis Dreyfus, a 13 per cent stake in Namoi.

Namoi shares closed six cents higher at 30 cents.

The company’s chairman Stuart Boydell said the proposal would deliver Namoi liquidity to develop new business opportunities and strengthen its balance sheet.

Namoi will continue to operate its ginning and seed operations as normal.

At least 75 per cent of the company’s growing members will need to approve the deal with Louis Dreyfus, with a vote expected in late February.