Adama considers merger with Chinese firm Hubei Sanonda

Adama considers merger with Chinese firm Hubei Sanonda

3:25 PM, 17th August 2015
Adama considers merger with Chinese firm Hubei Sanonda

TEL AVIV, ISRAEL: Adama Agricultural Solutions Ltd said that its shareholders are exploring a potential combination with Hubei Sanonda Ltd (Sanonda), a Chinese crop protection manufacturer traded on the Shenzhen stock exchange, which, if implemented, will allow the combined company to achieve full integration as well as public listing.

The process of negotiating and approving the contemplated transaction is expected to take several months, the company said.

Adama is expected to be able to achieve two key pillars of its strategy - integration with Chinese agrochemical businesses that are part of the ChemChina group and flotation on one of the world’s largest stock exchanges. The combination will allow Adama to accelerate its China integration, which it has been pursuing in recent years.

The potential transaction is intended to be accomplished through the issuance of new shares by Sanonda to the existing owners of Adama - CNAC, ChemChina’s strategic business division the controlling shareholder of Adama and Koor of Israel’s IDB Group - in exchange for their ownership stakes in Adama. Sanonda is currently controlled by CNAC, which owns approximately 20.15 percent of the shares of Sanonda. Adama also holds an approximately 10.6 percent stake in Sanonda, which it acquired during 2013.

As part of the contemplated transaction, Adama is considering selling its Sanonda stake, and distributing to its existing shareholders a dividend in a substantial amount.

According to Chinese securities law requirements, trading in Sanonda’s shares was suspended as of 5 Aug.

© Worldofchemicals News

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