Makhteshim Agan Industries Ltd. (TASE: MAIN) management and workers committee today signed an agreement to streamline the company. Representatives of the Histadrut (General Federation of Labor in Israel) and of Makhteshim's parent company, IDB Holding Corp. Ltd. (TASE:IDBH) also signed the agreement. The agreement was reached after prolonged negotiations, demonstrations, and other protest measures.
The agreement lifts a major barrier for the sale of the agrochemicals company to China National Chemical Corporation (ChemChina). A sale would likely result in Makhteshim being delisted from the Tel Aviv Stock Exchange (TASE).
A cornerstone of the agreement is Makhteshim's promise to keep production in Israel, rather than exporting it in the event of a sale. The Histadrut said this was the first time that such a commitment has been given by an employer. Makhteshim's management has undertaken to keep the company's main production facilities operating until at least June 2017.
The agreement also includes the voluntary retirement of Makhteshim employees over the age of 57. This means 100 employees at the Agan Chemical Works factory in Ashdod, and another 100 employees at Makhteshim's Ramat Hovav factory. 70 employees will retire in 2011 and the other 130 employees in 2012. The retiring employees will receive salaries until the age of 67, as well as a one-time severance bonus.
A capital market source told "Globes", "This is another milestone toward a final signing on the agreement with ChemChina. IDB wants a quiet sale and is dealing with the burning issues, such as employees, before signing the main agreement. All in all, this is good news for the Makhteshim share."
Makhtshim workers committee chairman Yaakov Cohen said, "On behalf of the workers, I thank all the parties involved in the negotiations. I think that we succeeded in achieving good results from our perspective, which guarantee our rights and protect jobs."
Two weeks ago, Makhteshim notified the TASE that it was in talks for the sale of the company to ChemChina, which offered to buy 70% of the company at a company value of $2.7 billion, well above its market cap prior to the announcement. The announcement ignited a fight with Makhteshim's employees, who launched a campaign against IDB controlling shareholder Nochi Dankner against the possible transfer of the company's production to China.
Makhteshim's share price rose 1.9% by mid-afternoon to NIS 18.62, giving a market cap of NIS 8.39 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on October 31, 2010
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