ADIA, Brookfield, KKR and TPG will separately Invest ₹4,040 crore in agri-related platforms owned by UPL Ltd.
A wholly-owned subsidiary of the Abu Dhabi Investment Authority, Brookfield and TPG will invest ₹1,580 crore for a 9.09 per cent stake in UPL SAS - India Agtech Platform at an equity valuation of ₹17,380 crore
KKR will invest ₹2,460 crore for a 13.33 per cent stake ‘Advanta Enterprises - Global Seeds Platform’ at an equity valuation of ₹18,450 crore
A wholly-owned subsidiary of the Abu Dhabi Investment Authority & TPG will hold a 22.2 per cent stake in UPL Cayman, the Global Crop Protection Platform (ex-India).
These investments are independent transactions for which separate agreements have been negotiated between each investor and UPL Ltd.
The company said, the aim is to create distinct pure-play platforms to accelerate growth with different investors.
Jai Shroff, Global CEO, UPL said, “Our commitment to transform the global food value chain will now receive even more impetus with the creation of these distinct pure-play platforms. This shall enable to bring in enhanced focus, ensure better allocation & utilization of resources and outcome-oriented solutions to farmers.”
“In addition, it has enabled ‘fair value recognition’ of each ‘Individual Platform’ with investments from distinct marquee global investors resulting in significant unlocking of value for UPL’s existing shareholders. More importantly, this provides us an opportunity to unleash the growth potential of each of our distinct platforms to deliver accelerated and sustainable growth.” he added.
Key Highlights of Realignment
The 3-pronged realignment exercise is to be carried out as below: -
UPL SAS will be India’s largest ‘Integrated Agtech Platform.’ The platform will include the India crop protection business, SWAL, Adarsh Farm Services and the Nurture digital platform.
Global Crop Protection business (ex-India) to be transferred to UPL Ltd., Cayman (UPL Cayman), thereby making it a Pure-Play Crop Protection company and amongst the Top 5 companies in the sector globally”. ADIA & TPG will hold a 22.2% stake in UPL Cayman
ADIA & TPG will exit the non-crop protection business of UPL Corp, i.e., the International Seeds business and other global non-crop protection businesses (Decco, Animal Health and Health & Nutrition) for $ 241 million. The International seeds business is to be divested to Advanta Enterprises, the other global non-crop protection businesses will continue to be 100 per cent owned by UPL Corp.
The India and International Seeds businesses will be consolidated under a new entity called ‘Advanta Enterprises Limited’, incorporated as a subsidiary in India of UPL Ltd.
The ‘Corporate Realignment’ exercise is ‘envisaged to complete over the course of next 45-90 days’, subject to customary closing conditions and required approvals (shareholder, regulatory and lender approvals).