The Firm represented China National Agrochemical Corporation (“CNAC”) in connection with its acquisition by way of merger of 60% of outstanding shares in Makhteshim Agan Industries Ltd., an Israeli company listed on Tel-Aviv Stock Exchange (“MAI”). MAI is the world’s largest generic agrochemical company. The transaction is based on MAI’s equity valuation of US$2.4 billion. Under the merger agreement, CNAC will purchase 53% of MAI shares held by the public for US$1.272 billion and another 7% of MAI shares held by Koor Industries of the IDB Group (the existing controlling shareholder of MAI) for US$168 million. As part of the deal CNAC will arrange to provide Koor with US$960 million non recourse loan for 7 years secured by Koor’s 40% stake in MAI. Following the completion of the transaction, MAI will become a private company owned 60% by CNAC and 40% by Koor. CNAC and Koor signed a shareholders’ agreement to govern their relations in MAI. CNAC will appoint MAI’s Chairman and Koor will appoint MAI’s Vice Chairman. Closing of the transaction is subject to customary conditions, including the approval of MAI’s shareholders and the approval of the relevant Chinese government authorities. The closing is expected to occur in the second or third quarter of 2011. CNAC is wholly-owned subsidiary of ChemChina specialized in the agrochemical business.
The international team of Simpson Thacher attorneys that worked on the transaction includes: Shaolin Luo, Yi Zhang, Liang Wang, Yang Wang and Spencer Yee (M&A – Beijing), Kathryn Sudol and Ian Ho (M&A – Hong Kong), Adeeb Fadil (Environmental), David Vann and Étienne Renaudeau (Antitrust), Lori Lesser (IP), and Katharine Moir (Tax). Paralegals Emma Liu and Jianping Lu (Beijing) provide excellent translation support on this transaction.
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