business merger 311.
(photo credit: Courtesy IDB)
The merger of Israeli agrochemicals manufacturer Makhteshim Agan Industries with
a China National Chemical Corporation (ChemChina) subsidiary was completed on
Monday. The deal, worth around NIS 8.78 billion ($2.4 billion), is the largest
ever between a state-owned Chinese company and an Israeli
Makhteshim becomes a private company under the deal, effective
immediately. Chem- China subsidiary China National Agrochemical Corp.
owns 60 percent, while Koor Industries, a subsidiary of Nochi Dankner’s IDB
Group, holds on to the remaining 40%.
CNAC, China’s largest agrochemical
producer, acquired 53% of Makhteshim from public holdings for NIS 4.657 billion
($1.272 billion) and another 7% from Koor for NIS 615 million ($168 million). In
addition, Koor received NIS 3.514 billion ($960 million) in a seven-year
non-recourse loan secured by its remaining 40% stake in the
Company headquarters will remain in Israel, and existing
management personnel will continue in their positions.
Makhteshim employees’ options will be cancelled. The options will be purchased
for a total of NIS 73 million, including NIS 16 million to Makhteshim president
and CEO Erez Vidogman.
Makhteshim Agan is one of the world’s leading
manufacturers and distributors of cropprotection products, with a history dating
back to prestate Israel. The group was formed from the 1997 merger of Agan
(established in 1945) and Makhteshim (established in 1952). It became a publicly
traded company in 1998, and boasted sales revenues of $2.37 billion last year,
making it the seventh-highest grossing agrochemicals company in the
The deal, which followed a year of negotiations, was completed
just one week after IDB controlling shareholder Nochi Dankner agreed to sell his
majority share in supermarket chain Shufersal to British billionaire Leo Noé and
Shufersal partners Matthew Bronfman and Shalom Fisher.
“The completion of
this strategic partnership agreement between ChemChina and IDB Group is the
foundation stone for the realization of IDB Group’s ambition to divert its
activities abroad and develop a global presence with an emphasis on the Chinese
market,” Dankner said of the merger.
“The deal with ChemChina constitutes
an important step for IDB Group and for Israeli industry and we believe that it
will contribute to the building of economic relations between Israel and China –
a central player in the powering of global economic growth.”
President Ren Jianxin called Dankner an “inspiring business leader” and “ardent
patriot” for Israel, and said the deal would cement Makhteshim’s standing as one
of the world leaders in agrochemicals manufacturing.
advanced technologies, together with its entire marketing arrangement and its
excellent management team and staff, will all contribute to the creation of a
positive synergy in conjunction with our agrochemical dealings in China,” said
“Supplying food to the world is a central challenge for
ChemChina, and the cooperation between us will help add momentum to this