Dibai sells and distributes formulated crop protection products to the Chinese farmers
Adama now announced that it will purchase a 50% stake in Shanghai Dibai Plant Protection for a cash consideration of RMB370mm ($53m).
The acquisition is part of the strategic joint venture (JV) with Jiangsu Huifeng Bio Agriculture to commercialise Huifeng’s formulated crop protection product portfolio in the Chinese market.
In January this year, Adama entered into a non-binding memorandum of understanding (MoU) with Huifeng to purchase key parts of its crop protection business.
The announcement of the JV is a major step in advance of a larger transaction, under which Adama is anticipated to acquire Huifeng’s agrochemical business located at its main site in Dafeng, Jiangsu.
Adama China senior vice president An Liru said: “Our joint-venture’s strong commercial presence, numerous differentiated, patented products and wide portfolio of product registrations are highly complementary to ADAMA’s.”
Dibai, a wholly-owned subsidiary of Huifeng, has more than 150 product registrations
Dibai is a wholly-owned subsidiary of Huifeng, which sells and distributes formulated crop protection products in China.
Dibai has more than 150 product registrations, as well as an experienced sales team of 180 employees.
As per terms of the deal, Dibai will secure the exclusive, indefinite, royalty-free rights to license Huifeng’s existing and future registrations in China and the sales of formulated products in China will be conducted through the company.
Subject to the resumption of the majority of the formulation activities of Huifen and entering into definitive agreements for the overall transaction, the deal is expected to be completed in the first quarter of 2020.
Adama and Huifeng will jointly manage Dibai, as equal shareholders until the overall transaction concludes.
Huifeng chairman Zhong Hangen said: “This commercial joint venture brings a leading company in the China market with a strong portfolio of formulated, end-use products and an established sales force, together with the commercial guidance and direction of one of the world’s leading crop protection companies.”
In October this year, Adama agreed to acquire Peruvian crop protection company AgroKlinge for an undisclosed sum.