China's state owned chemical giant, National Chemical Corp (ChemChina) plans to buy a controlling stake in Israel's Makhteshim-Agan Industries Ltd, the world's largest maker of generic crop protection solutions, in a $2.4 billion deal.
Beijing-based ChemChina will buy 7 per cent of Makhteshim from Koor Industries, the parent company of Makhteshim, for $168 million and buy all the publicly traded stock or 53 per cent of Makhteshim for $1.272 million to bring its stake in the Tel Aviv-based crop protection company to 60 per cent.
The purchase price, based on current dollar exchange rates and taking into account some employee options, is 19.98 shekels a share, or a premium of 18 per cent to yesterday closing price of Makhteshim in Tel Aviv.
Under the proposed deal, Koor will retain 40 per cent of Makhteshim and ChemChina will loan Koor $960 million, taking the deal size to $2.4 billion.
ChemChina will be obliged to remain the largest shareholder in Makhteshim "for a number of years," while investment group Discount Investment Corporation has committed to being Koor's controlling investor for at least three years.
Makhteshim is a world leading manufacturer and distributor of generic crop protection products. With sales of $2.2 billion in 2009, Makhteshim ranks seventh in global agrochemical companies, fourth in Europe, with a global share of over 5 per cent.