ChemChina to acquire controlling stake in Makhteshim in a $2.4 billion deal
10 Jan 2011
Chinese state-owned chemical giant, National Chemical Corp (ChemChina) yesterday agreed to buy a 60-per cent controlling stake in Israel's Makhteshim-Agan Industries Ltd, (MAI) the world's largest maker of generic crop protection solutions, for $1.44 billion.
ChemChina will buy 53-per cent of the publicly traded stock of MAI at $5.57 per share or $1.272 billion, and acquire another 7 per cent from MAI's parent Koor Industries for $168 million.
Under the deal, Koor will retain 40-per cent of Makhteshim and ChemChina will arrange a seven-year non-recourse loan of $960 to Koor, taking the deal size to $2.4 billion.
The loan is taken on mortgaging Koor's 40 per cent stake in MAI, which could be repaid either by cash or through sale of shares of MAI.
Under the shareholder agreement between ChemChina and Koor, the deal also has provision for working towards a public offering for MAI within three years.
Koor is a unit of IDB Holding Corp run by Israeli billionaire Nochi Dankner.