Hyderabad Chemicals, a Hyderabad-based agrochemical and pesticides manufacturer, has decided to sell its 74 per cent stake to a Japanese firm Nihon Nohyaku, manufacturing basic and fine chemicals.

The transaction, valued at over ₹500 crore, is expected to close in January.

Nihon Nohyaku has been expanding its business and has chemical products, pharmaceuticals and animal health products, even as it caters to agrochemicals. Officials familiar with the transaction told BusinessLine on the condition of anonymity that the acquisition would help Nihon Nohyaku in building a marketing and manufacturing presence in India.

“The company has been looking to establish direct sales systems and production facilities in India, and wanted to acquire an Indian company to take their vision ahead,” said an official. Hyderabad Chemicals has its own distribution network, and research and development facilities.

The deal has helped Hyderabad Chemicals “divest at an attractive valuation and work under a Japanese partner.”

A statement from the Japanese company noted that the companies hope to start joint operation with current shareholders after completion of related procedures. The Japanese company is also intending to dispatch a team for the board of directors, officers and managers to jointly operate the company.

Yohichi Kohyama, Nihon Nohyaku’s President, said in the statement that the company had decided to invest in Hyderabad Chemicals since it matched the Japanese firm’s business strategy.

He added that Hyderabad Chemicals also has a cost competitive production system, and by “utilising its technology and capacity, it is expected to boost our business not only in India, but also in other countries.”

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