Sanonda is a subsidiary of China National Chemical Corp (ChemChina), which also owns 60% of Adama Agricultural Solutions, and may also buy the remaining 40% of the Israeli company, which is the world’s biggest producer of generic crop protection products. The merger was first announced last year and could be completed in the first half of 2017.
The proposed deal is part of a big push among global agrochemicals companies to consolidate, partly in response to a drop in commodity prices that has hit farm incomes.
ChemChina is in the process of acquiring Swiss pesticides and seeds maker Syngenta for US$43bil but its business is expected to be run separately from Adama.
Adama said two recent developments had helped to pave the way for the potential merger.
The first was when a Chinese agency published a proposed amendment to China’s securities regulations that would allow a global entity to be combined with one publicly-traded in China.
Sanonda is listed on the Shenzhen Stock Exchange.
That was followed by Adama shareholders agreeing to a unit of ChemChina, or a third party designated by it, buying the remaining 40% stake in Adama from Israel’s Discount Investment Corp.
That transaction would value Adama’s equity at approximately US$3.5bil.
