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Bloomberg
Discount Investment Corp. is poised for the biggest increase on record after entering into an accord to sell its remaining stake in Adama Agricultural Solutions Ltd., the world’s largest maker of generic agro-chemicals, to China National Chemical Corp.
Shares in Discount leaped 23 percent to 10.94 shekels in Tel Aviv in 21 times the 3-month average daily volume. The yield on the company’s 4.95 percent bonds maturing December 2025 dropped 129 basis points to 6 percent, the lowest level on a closing basis since November 2014.
China National, known as ChemChina, will pay Discount, owned by debt-ridden IDB Development Corp, US$230 million for its 40 percent holding in Adama and will forgive a US$1.17 billion loan, the company said in a statement. The Beijing-based manufacturer bought a controlling stake in 2011.
IDB, controlled by Argentine businessman Eduardo Elsztain, needs to raise funds for the company’s operations and has been seeking the sale of assets. Discount said it expects to post a 690-million shekel ($178 million) profit from the sale to ChemChina. The regulator is now demanding the company divest the controlling stake in its Clal Insurance Enterprises Holdings Ltd unit via the Tel Aviv bourse after several attempts to sell Clal fell through. Within ChemChina’s agrochemicals business is a large portfolio of companies including Hubei Sanonda, Cangzhou Dahua, Shandong Dacheng, Jiangsu Anpon, Anhui Petrochemicals, and Huaihe Chemicals. It added Israel-based Makhteshim Agan in 2011 to the division in a 2.4 billion US dollars acquisition of a 60% stake in the company, the largest manufacturer of generic pesticides.
The chemical materials and speciality chemicals group made overseas acquisitions with two deals in 2006, both to acquire French companies. The first one was the Adisseo Group, a global animal nutrition feed firm that specialized in producing methionine, vitamins and biological enzymes. At the time of the purchase, Adisseo had worldwide market share of 30% in methionine. The other company was the organic silicon and sulphide business of Rhodia. With this acquisition the company became the third largest producer in the world of organic silicon.