China Approves Adama's Combination with Sanonda

Adama Agricultural Solutions recently reported that the M&A Panel of the China Securities Regulatory Commission (CSRC) has unconditionally approved its combination with Sanonda, paving the way for the consummation of the transaction, which is now expected in the coming weeks. Upon completion, the combined company will be floated on the Shenzhen Stock Exchange. The trading of Sanonda's shares, which had recently been suspended during the CSRC’s final review process, resumed on June 2.

Adama's combination with Sanonda is expected to create, in one coordinated move, the only integrated Global-China crop protection company, with combined 2016 sales of $3.35 billion. At its outset, it will be the sixth largest global crop protection company and the largest in China, as well as the first global one to be publicly traded on the flagship A-share market. In the context of the transaction, the combined company intends to raise around $250 million in new equity, which will be used to accelerate its growth. At current market prices, the combined company's pro-forma equity is valued at approximately $4.6 billion, placing its pro-forma enterprise value at approximately $5.7 billion.

Upon receipt of the relevant corporate approvals, the combined company will operate under the ADAMA name and brand and will be led by Adama’s global management team, to be joined by colleagues from China engaged with the combined China operation. The central functions of the combined company will continue to be run from Israel, including global R&D, registration and operations.

The combination is still subject to certain additional regulatory approvals, which are expected to be obtained in the coming weeks.