Discount Sells Adama stake to ChemChina
Israel’s Discount Investment has agreed to sell a 40% share in crop protection company Adama Agricultural Solutions to ChemChina for $1.4 billion, including debt, thus giving the Chinese company full control. ChemChina bought a 60% stake in Adama for $2.4 billion in October 2011. The Israeli firm said that in return for the remaining shares, ChemChina will cover a loan of $1.17 billion and pay $230 million in cash.
Discount and ChemChina have recently been locked in a legal dispute over ChemChina’s proposed acquisition of Syngenta because of a non-compete clause in the 2011 share sale agreement, among other issues.
The deal paves the way for a merger between Adama, the world’s largest producer of generic crop protection products, and smaller producer Sanonda, a ChemChina subsidiary. The transaction with Sanonda could be completed in the first half of 2017.
Adama said the merger plans have been boosted by a proposed ruling from the China Securities Regulatory Commission to allow an international entity to combine with one publicly traded in China. The combined company would be headquartered in Israel and keep the Adama name.
