The acquisition will bolster ADAMA’s presence in the crop protection market in China and will also strengthen its global product portfolio
Officials of ChemChina, ADAMA, Syngenta Group at the signing ceremony. (Credit: ADAMA Ltd.)
ADAMA, a crop protection company, announced that it has signed an agreement to acquire a majority stake in Huifeng synthesis and formulation facilities.
The deal is expected to significantly strengthen ADAMA’s presence in China and its global product offering.
In November last year, ADAMA announced the acquisition of a 50% stake in Shanghai Dibai Plant Protection (Dibai), a subsidiary of Huifeng.
Dibai is focused on the sale and distribution of key formulated crop protection products in China.
Closing of the transaction is expected to take place in the coming weeks, subject to customary approvals and closing conditions.
Under the new agreement, ADAMA will acquire 51% stake in Jiangsu Kelinong (Kelinong), a newly established subsidiary of Huifeng.
Huifeng will transfer key crop protection synthesis and formulation facilities to Kelinong as part of the deal.
The deal also includes ADAMA acquiring an additional 1% stake in Dibai.
After the completion of the transactions, ADAMA will hold 51% of stake in both Kelinong and Dibai, significantly strengthening its presence in the China crop protection market.
ADAMA will $175m in cash for the two acquisitions
The total cash consideration for both the transaction is about RMB1.22bn ($175m).
Through Kelinong’s acquisition, ADAMA could significantly enhance its business both globally and in the country, by adding key backward-integrated molecules with competitive positions, such as Prochloraz, Bromoxynil, MCPA, Epoxiconazole, and Trinexapec.
By acquiring majority stake in Dibai, ADAMA aims to expand its presence in the key market. Dibai has a portfolio of crop protection formulations, exclusive licence to more than 150 products and a sales team of about 170 employees across the country.
ADAMA president and CEO Ignacio Dominguez said: “Through this acquisition, we continue to accelerate our growth strategy both in the Chinese market as well as globally, gaining significant competitive advantage in worldwide markets through key backward-integrated molecules.
“Mr. Zhong Hangen, Chairman of Huifeng, has built Huifeng into one of the leading crop protection manufacturers in China, and we are excited to bring it into the ADAMA fold as a key part of our global operational and commercial infrastructure.”