ChemChina completes Makhteshim Agan buy
Koor will report a net profit of NIS 582-674 million on the sale. Makhteshim CEO Erez Vigodman will receive NIS 16 million for his options.
As of today, Makhteshim becomes a private company, 60% of which is owned by ChemChina, and 40% by Koor. IDB subsidiary Koor Industries Ltd. (TASE:KOR) received $1.1 billion, including $168 million for 7% of Makhteshim and $960 million in a non-recourse loan secured by its remaining 40% stake in the company. Koor will report a net profit of NIS 582-674 million on the sale in its financial report for the fourth quarter and its shareholders' equity will increase by NIS 655-747 million.
Makhteshim's existing management team will continue to lead the company, and its headquarters will remain in Israel. The company intends to continue operating all of its existing global manufacturing facilities. It will also seek to capitalize on its strong base in China to further expand its global infrastructure and its ability to offer the industry’s leading portfolio of crop protection solutions.
With the closing of the sale, all Makhteshim employees' options will be cancelled, as a condition of the deal. The company will buy all the options held by 130 employees and managers, including ten top executives. The options will be purchased at their fair value for a total of NIS 73 million, including NIS 16 million that will be paid to Makhteshim president and CEO Erez Vigodman.
Makhteshim noted that its merger with ChemChina is the largest transaction ever concluded between a Chinese and an Israeli company, and was a major milestone in its 66-year history.
Makhteshim chairman Ami Erel said, "I want to thank the board of directors for their contribution to the complicated procedures required to obtain approval of the merger, and members of management, headed by Erez Vigodman, for their leadership, management, and hard work during this period.
Koor's share price rose 4.6% in morning trading to NIS 44.48, giving a market cap of NIS 2 billion, and the share price of its direct parent company, Discount Investment Corporation (TASE: DISI), rose 4.4% to NIS 37.60, giving a market cap of NIS 3.1 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on October 17, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011
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