Sumitomo Chemical to buy agrochemicals company Excel Crop Care
06 June 2016
Japan's Sumitomo Chemical Co Ltd today launched an open offer to acquire an additional 30-per cent stake in Mumbai-based agrochemicals company Excel Crop Care Ltd, for Rs 415.80 crore.
The move comes a day after the Tokyo-based company struck a deal to buy a 44.98-per cent stake in Excel held by the founding family and financial investors for around Rs623.44 crore.
The move also comes six years after Sumitomo Chemical acquired Mumbai-based pesticides and insecticide manufacturer New Chemi Industries for an undisclosed sum.
Excel Crop Care said in a filing to BSE that its board met on Sunday and approved a share purchase agreement between the company, its promoter group entities and certain public shareholders, and Sumitomo group.
Under the deal, Sumitomo will buy over 49.5 lakh shares of Excel Crop Care at Rs 1,259.36 each from the company, promoter group entities and certain public shareholders, comprising members of Ratnabali group.
Ratnabali Capital Markets hold 14.99 per cent stake, and Ratnabali Investments holds 3.95 per cent, while institutional shareholders Life Insurance Corporation holds 6.58 per cent and DSP Blackrock holds 1.92 per cent.
The company and the promoter group will sell 27,20,501 shares or a 24.72 per cent stake to Sumitomo Chemical and its nominees.
Sumitomo Chemical will also buy 22,30,000 shares or 20.26 per cent stake from public shareholders.
In a separate filing, Excel Crop Care said that Sumitomo will launch an open public offer to buy over 33 lakh share or 30 per cent stake for Rs 1,259.36 totaling Rs 415.80 crore.
The 30-per cent stake acquisition triggers certain requirements of the Securities Laws of India into operation, under which Sumitomo Chemical Group is expected to make an offer on the market for additional public shares that will result in the Japanese company acquiring a maximum of 75 per cent of Excel Crop.
Sumitomo Chemical said that the transaction is parts of its efforts to enhance its agrochemicals business in India.
Founded in 2002 by brothers CC Shroff, Govindji Shroff and Kantisen Shroff as a manufacturer of insecticides, Excel Crop has risen out of the demerged portfolio of the agricultural products segment of Excel Industries Ltd.
Besides solutions in soil health, seed treatment, crop protection, pest management, Excel Crop Care also offers effective post-harvest treatment that has ensured smooth supply and trade in agricultural commodities to millions of farmers in more than 70 countries.
With more than 1000 employees and state of the art production facilities, Excel Crop Care produces around 27000 tonnes of pesticide actives annually.
Its brands are sold through a chain of more than 30 depots, 4,500 distributors and 40,000 dealers.
Over the years, the agrochemical market in India has grown steadily, averaging 6.4 per cent per annum over the past 5 years, and is currently ranked the 9th in size in the world market.
India's market is expected to keep expanding at a high rate to meet a brisk demand for increased food production as the country's population rises.