The deal is the second stage of a previous agreement signed last November, under which Adama committed to take a 50% share in the Chinese group’s wholly owned subsidiary, Shanghai Dibai Plant Protection Company. Dibai sells and distributes key formulated crop protection products in China. Closing of this first phase is expected in the coming weeks.

Under the latest and second phase, Adama will acquire a 51% equity stake in Jiangsu Kelinong, a newly established and wholly owned subsidiary of Huifeng, to which the latter company will transfer its key crop protection synthesis and formulation facilities.

 In addition, Adama will take another 1% stake in Dibai, giving it a majority stake in both companies and significantly boosting its presence in the Chinese crop protection market.

The total sum for both parts of the transaction amounts to about $175 million.

Jiangsu Kelinong has exclusive licenses to more than 150 crop protection products registered by Huifeng. Adama said the acquisition of Kelinong will add key backward-integrated molecules with competitive positions, including Prochloraz, Bromoxynil, phenoxy herbicide MCPA (2-methyl-4-chlorophenoxyacetic acid), Epoxiconazole and Trinexapec, which are expected to drive significant growth through the Tel Aviv-based group’s global market reach.

Closing of the second part of the agreement remains subject to the usual conditions, including regulatory and corporate approvals. It is also further subject to the resumption of full production at all of Huifeng’s relevant facilities. Adama said Huifeng has made significant progress in rectifying its environmental problems and is in the process of obtaining approvals for restarting production activities.

Commenting on the deal, Huifeng’s chairman, Zhong Hangen, said: “We believe this commercial and operational partnership between two strong companies […..] will lead to significant new opportunities for expansion into the global market for Huifeng’s leading crop protection products.”

Author: Elaine Burridge, Freelance Journalist