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Syngenta/Adama to sell EEA assets to Nufarm

Syngenta and Adama Agricultural Solutions have entered into a binding agreement with Nufarm to sell a portfolio of their crop protection products for $490 million.

Syngenta and Adama Agricultural Solutions have entered into a binding agreement with Nufarm to sell a portfolio of their crop protection products for $490 million. The transaction was carried out in accordance with the commitments given to the European Commission relating to ChemChina’s acquisition of Syngenta, which was completed in June.

The combined portfolio of products being divested includes off-patent crop protection formulations in the herbicides, fungicides, insecticides and other categories in the European Economic Area, the EEA. No physical assets (apart from inventory) or personnel will be transferred as part of the transaction. Syngenta will also sell inventory to Nufarm at the closing of the transaction, which is expected to occur in the first quarter of 2018.

Simultaneously, Adama is to receive certain crop protection products and distribution rights from Syngenta, in exchange for entering into agreements for the divestiture of certain products in Europe to Nufarm. Adama will receive a portfolio of crop protection products, including product registrations and related trademarks and brands for multiple formulated crop protection products and active ingredients in the EEA, as well as co-distribution rights to certain Syngenta products in Europe.

In exchange for these products and rights to be received from Syngenta, Adama will divest, alongside Syngenta, certain crop protection products in the EEA to Nufarm, while maintaining its ability to continue to sell such products in other countries outside Europe, and in some cases within Europe as well. Adama’s share of the $490 million to be received from Nufarm, net of any expenses borne by it, will be remitted to Syngenta in exchange for the assets and rights it will be receiving from Syngenta.

This transfer and divestiture of products in Europe follows a similar transfer of Syngenta products to Adama earlier in the year in the US in exchange for Adama’s divestiture of certain products there to Amvac, which was conducted to obtain the approval by the US FTC of the acquisition of Syngenta by ChemChina. At that time, Adama took over Syngenta’s chlorothalonil-based fungicides, Bravo, Bravo Weather Stik, Bravo Ultrex and Bravo ZN, as well as the insecticide, Fulfill (pymetrozine), and the cyromazine-based insect growth regulators, Trigard and Armor.

The portfolios of transferred products and rights from Syngenta are of similar nature and economic value to the ones to be divested, and therefore the net impact on Adama of the transactions in both Europe and the US is expected to be immaterial. No physical assets (apart from inventory) or personnel will be transferred as part of either transaction.

Completion of the transaction with Nufarm is subject to clearance by the relevant European Competition authorities, as well as qualification of Nufarm by the European Commission as a “suitable purchaser”, as stipulated under the commitments. The disposal process has been carried out under the supervision of Duff & Phelps in their role as the monitoring trustee to the European Commission.

The commitments given by ChemChina to the Commission in April included the divestiture of a “significant” part of Adama’s pesticide business, notably fungicides for cereals, fruits and oilseed rape, herbicides for cereals, maize, sunflowers and vegetables, insecticides for cereals, maize, fruits, oilseed rape and vegetables and its seed treatment products for cereals and sugar beet. Some of Syngenta's pesticides, particularly fungicides for vegetables and herbicides for cereals, vegetables and sunflowers, were also to be divested. Further sales were to include: 29 of Adama's generic pesticides under development and access to third parties to studies and field trial results for these products; a significant part of Adama's plant growth regulator business for cereals; and all relevant intangible assets underpinning the divested pesticides.

In June, US company American Vanguard (Amvac) acquired the insecticide, abamectin, the fungicide, chlorothalonil, and the herbicide, paraquat, from Adama as a condition of the US Federal Trade Commission’s approval of ChemChina’s takeover of Syngenta. In August, Amvac’s wholly owned subsidiary, Amvac Mexico, acquired selective herbicides and contact fungicides sold in Mexico from Syngenta. Among the divested products were the herbicides: atrazine and ametryn-based Gesapax H-375, Gesapax Combi 80% WP, Gesapax H Autosuspendible and Paquete Gesapax Gold; and the water-dispersible granule formulation, Krismat WG (trifloxysulfuron-sodium + ametryn). There were also the chlorothalonil-based fungicides, Bravo 720, and Bravo Gold and Daconil 2787 75% WP, and the isopyrazam-based Reflect.

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