United Phos Set to Buy Cerexagri

United Phosphorus, the country’s largest agrochemical company, is all set to acquire Cerexagri for euro 111 million (nearly Rs 637 crore). The acquisition, fifth in a row this calendar, will make United Phosphorous the third largest generic agrochemical company in the world. This year, the company had acquired Advanta BV, Crop Serve, some products from Bayer Cropscience and Bensulfuron from DuPont. Sources close to the development said both the parties had reached the final stage of agreement.A deal might be announced late this evening or tomorrow morning, they added.

United Phosphorus is being represented by YES Bank and Close Brothers for this transaction. United Phosphorus posted consolidate sales of Rs 1,840 crore last year.

Cerexagri is the crop-science business unit of Arkema Inc with annual revenue of about euro 200 million (nearly Rs 1,150 crore).  It specialises in plant protection products, mainly fungicides, which account for about 75 per cent of its business, and post-harvest treatment products for fruits and vegetables where it is the market leader.

Cerexagri has over 70 years of experience in the global market. The company has a strong distribution presence in Europe and the US which together account for about 80 per cent of its business. The company has manufacturing sites in Europe with employment of 630 personnel. Industry sources said United Phosphorus’ product offering of insecticides, herbicides and fumigants fits well with the complementary range in fungicides of Cerexagri.

What makes this acquisition important is that it makes UPL the third-largest generic agrochemical company in the world. UPL manufactures insecticides, herbicides and fumigants, and is the world’s largest producer of Aluminium Phosphide.

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Cerexagri has annual revenues of about euro 200 mn and specialises in plant protection products, mainly fungicides and post-harvest treatment products for fruits and vegetables where it is market leader.

Cerexagri has over 70 years of experience in the global market and has a strong distribution presence in Europe and the US.As for funding the acquisition, UPL plans to dip into internal accruals as well as loans, the company CEO Raju Shroff said. UPL’s group sales for the year ended March 31, 2006 were about $410 mn.The company may close the current financial year with Rs 3,200-3,300 crore. Also what is notable is that Cerexagri will be UPL’s fifth acquisition in this calendar year. It earlier bougt Advanta BV, Crop Serve, products from Bayer Cropscience and Bensulfuron from Dupont. UPL was represented by YES Bank Ltd and Close Brothers in the transaction.