Sumitomo Chemical has entered into an agreement to acquire 45 per cent in Excel Crop Care from its promoters and certain public shareholders including Ratnabali Group and Aditya Goenka for Rs 623 crore.
The Japanese conglomerate, Sumitomo, has also made an open offer to buy another 30 per cent (33.02 lakh shares) from common shareholders at Rs 1,259.36 a share with an investment of Rs 416 crore.
According to the share sale agreement signed, the promoters of Excel Crop Care, the Shroff family, would divest about 25 per cent, while Ratnabali Group would offload another 20 per cent to Sumitomo at Rs 1,259.36 per share, valuing the company at about Rs 1,386 crore. The transaction is subject to certain conditions to close, including regulatory approvals, said the company in a statement on Monday.
Founded in 1941, the agrochemical business of Excel Industries was spun off into a separate entity in 2003 with an objective to focus more on the chemicals and agrochemical sectors separately.
As part of the strategic direction, the Shroff family has decided to focus on speciality chemicals, pharma intermediates, pharma actives, performance chemicals and environment and biotech products as a primary area for future activities across its group.
With Excel Crop Care’s strong manufacturing capabilities along with Sumitomo’s research capabilities, the promoters feel the company would reach greater heights enabling Indian farmers to access newer technologies and products.
Dipesh Shroff, Managing Director, ECCL said the Japanese company has the right resources and expertise to take Excel to its next phase of growth.
Ray Nishimoto, Director and President of Health and Crop Sciences Sector, Sumitomo, said Excel’s robust off-patent product portfolio and low-cost modern manufacturing facilities will help increase its market share in the agrochemical market both in India and worldwide.
Shares of Excel Crop were up 0.18 per cent at Rs 1,223 on Monday.