ChemChina To Purchase Stake In Makhteshim-Agan
December 28, 2010 China National Chemical Corp. (ChemChina) has offered to buy a controlling stake in Makhteshim-Agan Industries Ltd., the largest maker of generic agricultural chemicals, in a deal valuing the Israeli company at $2.4 billion.
ChemChina will gain a 60% share by purchasing 53% of the company’s stock from public shareholders and the remaining 7% of shares from Koor Industries, Makhteshim’s parent company, which will retain 40% of the company.
The public shareholders of the company will receive aggregate payout of about $1.272 million for the sale of approximately 53% of the company’s shares, and Koor will receive consideration of approximately $168 million for the sale of approximately 7% of the company’s shares.
In addition, as part of the transaction, ChemChina is anticipated to arrange for a non-recourse loan to Koor in the amount of $960 million, which shall be secured only by the company’s shares held by Koor. ChemChina will be obligated to remain the largest shareholder in the company for a number of years, and Discount Investment Corporation Ltd., the controlling shareholder in Koor, shall commit not to sell control in Koor for at least three years, according to the companies.
The closing of the transaction is anticipated to occur during the second or third quarter of 2011, although there is no assurance the transaction will be completed, according to the release. The respective boards of directors are expected to approve the deal in January.
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