Adama to Buy Huifeng Crop Protection Assets

Adama’s expansion in China continues to gather pace with the signing of a Memorandum of Understanding (MoU) to potentially buy key parts of Jiangsu Huifeng Bio Agriculture’s crop protection assets.

The non-binding agreement would expand the Israeli firm’s footprint both in China and globally, giving it access to backward-integrated and competitive positions in key molecules. It comes just days after Adama said it was making “significant progress” towards acquiring Chinese crop protection ingredients manufacturer Jiangsu Anpon Electrochemical.

Huifeng had been supplying intermediates and active ingredients to Adama (as well as other crop protection companies) until March 2018 when an investigation by environmental regulators halted production at the Chinese company’s sites. All of the company’s formulation lines have since resumed operations after passing inspections in November, while eight synthesis lines have also restarted following clearance by regulators.

Adama said Huifeng is working intensively with the relevant authorities to expedite full resumption of all production, adding that any sale will be subject to the rectification of all identified environmental matters, as well as the full resumption of all in-scope production facilities.

The business to be acquired is expected to include the agrochemical-related commercial and operational activities of Huifeng’s main site in Dafeng, with the possibility of expanding the transaction to include other selected relevant assets. Should agreement be reached, Huifeng will transfer the assets into a new wholly owned subsidiary, which will then be acquired by Adama.

A proposed timescale for completing the acquisition, which remains subject to due diligence, definitive agreements as well as all corporate and regulatory approvals, has not been disclosed.