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Sumitomo moves to take 20% of Nufarm, gaining Australasian farm chemicals

Friday 12th March 2010

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Nufarm, the Australian-headquartered worldwide manufacturer of farm chemicals, has received a formal shareholders’ offer from Japan’s Sumitomo to acquire up to 20% of its shares at A$14 each.

The company which morphed out of former NZX-listed Fernz, changing location and name in crossing the Tasman in 2000, has grown and acquired its way to become the world’s ninth largest crop protection company.

Last year Nufarm was courted by China’s Sinochem as well as Sumitomo, with the Japanese company becoming the preferred bidder for up to a fifth of its shares. Sumitomo is a diverse conglomerate with businesses ranging from metal products and minerals, to media and logistics. In the last half year to September its worldwide sales were about $11.8 billion.

Sumitomo’s crop protection business, which has annual sales of about US$1.3 billion is complementary to Nufarm’s, with more than 40% of its revenue derived from insecticides. A major component of Nufarm’s income is from glyphosphate herbicide.

Nufarm directors have recommended the share purchase, and the tender offer will run from March 12 to April 9.

On completion of the tender offer, Nufarm plans to raise A$250 million via a renounceable entitlement offer to shareholders, the offer to be underwritten by UBS AG.

“Our balance sheet is expected to be in a strong position at year end, allowing us to pursue growth opportunities and to continue to support the ongoing needs of the business,” Nufarm managing director Doug Rathbone said.

Businesswire.co.nz

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