Nufarm Limited announced on Monday, 30th September it had entered into an agreement to sell its South American crop protection and seed treatment operations in Brazil, Argentina, Colombia and Chile to Sumitomo Chemical Company Limited for $1,188 million cash (on a cash-free, debt-free basis and subject to customary net working capital adjustments on completion).
Nufarm has also extended its existing commercial agreements and entered into new commercial arrangements with Sumitomo.
Nufarm Managing Director and CEO, Greg Hunt, said, “We have a very capable management and commercial team in South America who have built a strong distribution network and loyal customer base. This is reflected in the growth and stabilisation of earnings in the business over the past five years”.
“The significant reinvestment we have made in our European, Nuseed and North American businesses in recent years, along with the next phase of transformation in our Australian business, is expected to deliver earnings growth and improved returns for shareholders in the coming years”.
Mr Hunt confirmed Nufarm’s relationship with Sumitomo would be further strengthened by the proposed agreement.
Sumitomo Chemical Executive Vice President, Ray Nishimoto, commented, “Nufarm has built a strong distribution network in South America and this Transaction will realise value for shareholders in both companies. We look forward to continuing our long-term relationship with Nufarm as a strategic partner and major shareholder”.
Following the Transaction, Nufarm will operate a diversified global crop protection business and a fast growing, proprietary seed technology business with an attractive omega-3 canola commercialisation opportunity. The crop protection business will focus on the major agricultural markets of Europe, North America and Asia Pacific with a diverse portfolio of herbicide, insecticide and fungicide products to address growers’ needs across the crop lifecycle.
The Transaction is subject to shareholder approval, regulatory approvals and satisfaction of other conditions precedent.
UBS AG, Australia Branch is acting as financial adviser and Arnold Bloch Leibler as legal adviser to Nufarm in relation to the transaction. PricewaterhouseCoopers has been appointed as the independent expert.
Source: Nufarm Limited
