Nufarm to buy $490m of European agchem products
Sipa Press/REX/Shutterstock The Australian chemical firm Nufarm has agreed to buy a European portfolio of crop protection products from Syngenta and Adama Agricultural Solutions, in a deal worth US$490m (£372m).
The acquisition will strengthen Nufarm’s presence in the European market, while also enabling ChemChina (which owns Adama) to comply with commitments given to the European Commission in relation to its own acquisition of Syngenta, which should be completed in Europe by the end of 2017.
Nufarm’s deal will see it purchase a reported 50 crop protection product lines, including off-patent formulations of herbicides, fungicides and insecticides.
It won’t include any physical assets, apart from inventory – at a further reported cost of US$50m (£38m) – and no personnel will be transferred as part of the deal.
See also: EU ‘stops clock’ on probe into Bayer/Monsanto merger
The deal is expected to be completed in the first quarter of 2018, subject to clearance by the European Commission.
The acquisition is forecast to deliver annual revenues of Aus$250m (£148m) and operating earnings of up to Aus$100m (£59m) in the 2019 financial year.
Nufarm will fund most of the transaction via a share issue. Linked to the deal, Adama will also take on some product lines from Syngenta as part of the ChemChina restructure.
String of mergers
The deal is the latest in a string of mergers and acquisitions across the global agchem industry, including Bayer’s purchase of Monsanto – which in turn led to divestment of part of Bayer’s crop science business to BASF – and the merger between Dow and Dupont.
The European Commission is still investigating the Bayer-Monsanto deal over concerns that it will stifle competition in the market. Such ongoing consolidation could limit product choice for farmers, with the potential for higher prices, which may impact on end consumers.
According to a report in the Sydney Morning Herald, Nufarm is also in exclusive discussions with another party to acquire a crop protection portfolio for less than $100m (£76m). It is expecting to finalise this acquisition in the coming weeks.