China National Chemical Corp (ChemChina) and two US private
equity firms agreed to pay A$3 billion ($2.75 billion) in cash for
Australia's Nufarm Ltd, a deal that would form the world's largest
supplier of generic farm chemicals.
The offer, by ChemChina, Blackstone Group and Fox Paine
Management, values the Melbourne-based company at A$17.55 a share,
27 percent higher than its closing price on October 30, Nufarm said
yesterday in a statement. The price includes the payment of a 30
cent a share dividend by Nufarm, it said.
ChemChina is the first State-owned Chinese company to team up
with buyout firms for an overseas acquisition. Buying Nufarm gives
ChemChina entry to the $36 billion global market for herbicides and
pesticides as a worldwide agricultural boom spurs acquisitions.
Under the offer, Nufarm's management team would continue to
manage the combined operations of Nufarm and ChemChina.
Nufarm said it would recommend shareholders vote for the offer,
subject to there being no better offer and to an independent
expert's report, but added that it was subject to a number of
conditions and there was no certainty it would result in a formal
bid.
Any takeover would need the support of Nufarm CEO Doug Rathbone,
who owns 17 percent of the company, and the Goodfellow family in
New Zealand, whose affiliates together own about 10 percent.
Analysts said Nufarm has been seen as ripe for a takeover as
chemical companies and private equity investors look to tap into
booming demand from producers of soft commodities such as sugar.
They said there could be other offers.
ChemChina's plan marks its latest push offshore, which began in
2005, when it bought a European silicone business from French firm
Rhodia. The company was created in 2004 by putting together several
chemical firms spun off from the former Ministry of Chemical
Industry.
Earlier in September Blackstone said it would spend $600 million
on a 20 percent stake in China National BlueStar (Group) Corp, a
subsidiary of ChemChina.
Blackstone will buy the stake from ChemChina, which will hold
the other 80 percent of BlueStar after the deal.
(China Daily-Agencies November 6,
2007)
