Nufarm Considering Bid

By Scott C. Lucas|5 November 2007

There have been several bouts of press speculation about Nufarm’s potential suitors, though nothing has been confirmed by the company.

Makhteshim-Agan Industries (MAI) was one of the companies rumoured to be interested in acquiring Nufarm, though other names are in the mix. The latest is an offer believed to be from China National Chemical Corp. (ChemChina) for US $3.2 billion.

ChemChina, a state-owned company set up in 2004 that produces agricultural chemicals, has more than $US 10 billion in sales and more than $USb11 billion in assets. Its bid is being made in partnership with the US private equity group Blackstone, which has more than $US 90 billion in assets under management.

Nufarm managing director Doug Rathbone controls 17% of Nufarm, which is the eighth-biggest crop protection company in the world. Nufarm is reportedly waiting to see if the offer is topped by either MAI the European private equity firm Permira, which recently acquired Arysta Lifescience.

Linwar Securities senior analyst Stephen Scott said that the value increase in agriculture is creating more interest in companies such as Nufarm. “There is a sense there has been a lack of investment in agriculture in the long term,” he said in an Australian newspaper. “The resource sector had been underinvested in during the 1990s, so similarly there is a belief higher returns from agriculture could come in the future.” In addition, he said that Nufarm’s stake in Brazil through its ownership of Agripec has made the company particularly valuable.