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ChemChina to buy Israel's stake in Adama

July 19, 2016
Chemical Value Chain

Adama Agricultural Solutions Ltd. – a major producer of generic crop-protection products and owned 60% by China National Agrochemical Corp., a subsidiary of China National Chemical Corp. (ChemChina) – is poised to merge with Sanonda, a ChemChina-owned agricultural chemicals producer listed on the Shenzhen, China, stock exchange.

The combination is possible via a proposed ruling from the China Securities Regulatory Commission (CSRC) to allow an international entity to combine with one publicly traded in China.

Following the CSRC ruling, Adama shareholders—Koor Industries Ltd. (Tel Aviv), part of IDB Holding, owns Adama’s remaining 40%—have agreed for CNAC, or a third party designated by it, to acquire Koor’s interest in Adama for $230 million and assume its related nonrecourse loan in a transaction that values Adama’s equity at approximately $3.5 billion. The acquired shares will be included in the Adama-Sanonda combination together with the rest of CNAC’s shareholding in Adama.

Sanonda’s shares, which have been suspended from trading since the intended combination with Adama was announced in August 2015, are expected to resume trading on 4 August 2016. Adama and its shareholders are working with Sanonda to conclude the combination framework by that date, Adama says. Subject to receiving all required regulatory and corporate approvals, Adama’s merger with Sanonda is expected to be completed in the first half of 2017, resulting in a publicly traded, fully integrated entity.

Following the merger, it is expected the combined company, which will retain the Adama name and brand, will continue to be run by Adama’s management team, with China becoming a significant geographical business cluster. The new company will be headquartered in Israel and committed to continue growing its Israeli operations. Adama’s bonds will still be traded on the Tel Aviv Stock Exchange.

Discount Investment Corp. Ltd., part of IDB Holding—which in 2014 acquired Koor, a sister company—and ChemChina have been locked in a legal dispute over ChemChina’s proposed acquisition of Syngenta, according to Israeli reports. ChemChina announced in February its intention to acquire Syngenta, the leading agchems company.

By Natasha Alperowicz

Source: Chemical Week

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