Israeli ADAMA Agrochemicals buys Chinese cos from ChemChina for $623 million

ADAMA Agricultural Solutions will gain a major foothold in the Chinese market.

ADAMA

 

Agrochemicals company Adama Agricultural Solutions Ltd. (formerly Makhteshim Agan Industries) is acquiring Chinese businesses for $300 million and assuming a further $323 million in debt. In a party in interest deal, China National Agrochemical Corporation (CNAC), a strategic business unit of China National Chemical Corporation (ChemChina) and Adama’s parent company, will sell the companies, which 2013 sales of a $850 million.

Once finalized, the acquisition is expected to raise ADAMA’s revenue to close to $4 billion annually and give the company a major foothold in the Chinese market. Adama expects to close the transaction during the first half of 2015.

Through the acquisition, Adama will acquire 100% of each of Jiangsu Anpon, Jiangsu Maidao, Jiangsu Huaihe (collectively called the Huai’an Hub) and Jingzhou Sanonda Holdings (Sanonda Holdings), for a cash consideration of approximately $323 million, together with assumed net debt of approximately $300 million. The Huai’an Hub is based in the vicinity of Huai’an City in Jiangsu Province, the heart of the agrochemical industry in China. Sanonda Holdings owns a 20% stake in Hubei Sanonda Ltd. (Sanonda) a company publicly traded on the Shenzhen Stock Exchange, and its acquisition by Adama will increase Adama’s existing stake in Sanonda from 11% to 31%, with Adama thereby becoming the single largest shareholder in the company.

Adama Chairman Yang Xingqiang said, “We believe there is remarkable potential emanating from the combination between Adama and the Chinese businesses it is acquiring. These businesses are key players in the Chinese agrochemical industry, and we believe they will provide Adama with a significant foundation for a leading commercial and operational platform in China.”

Adama President and CEO Chen Lichtenstein said, “This is the most significant milestone in the evolution of Adama’s six-decade history, and in our partnership with ChemChina. The signing of the agreement with CNAC is a first step towards the creation of the only truly integrated China-Global player in the crop protection industry. ”

 

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