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Red Sun to acquire 60% stake in Ruralco, moving to market terminal
Feb. 2, 2018
Nanjing Red Sun Co.,Ltd.
ChinaFollow
China
Chinese agrochemical company Nanjing Red Sun has announced to acquire 60% stake in the Argentine agrochemical company Ruralco. The acquisition is expected to take place in two phases, where, in the first phase, Red Sun will spend its own fund of $8 million to acquire the 26.6667% stake in Fernando Diego Gimbatti, as held by five natural persons. In the second phase, Red Sun will contribute $15 million in kind to Ruralco as a capital increase to acquire 33.3333% stake in Ruralco. Upon completion of the acquisitions in two phases, Red Sun will hold some 60% of the shares in Ruralco.
Ruralco is a joint venture launched between FMC and NewCo in 2011. Ruralco is FMC’s distributor in Argentina, engaged in the distribution of agrochemicals, including herbicides, insecticides and fungicides while being licensed to sell cereal, rapeseed and feed crops. In 2016, the joint venture between FMC and NewCo was terminated. Ruralco derived from FMC some 37 independent clients in possession of 33 product registrations or authorized use of registrations.
In 2016, Ruralco achieved a business income of ARP581.63 million (approximately US$29.74 million), a business profit of ARP129.38 million ($6.62 million), a gross profit of ARP14.54 million ($743,600) and a net profit of ARP9.46 million ($483,400). In 2016, Red Sun achieved a business income of Yuan3.54 billion (approximately $558 million), a business profit of Yuan79.56 million ($12.56 million), a gross profit of Yuan176.66 million ($27.88 million) and a net profit, attributable to shareholders, of Yuan126.41 million ($19.96 million). Red Sun was listed in the 17th of the AgroPages Global Agrochemicals Ranking 2016.
“This acquisition is an important step towards the global presence of Red Sun, which will push forward the company’s move from the production side to market terminal, as well as expand the business deployment of the company in the global agricultural industry chain. It is a good approach to achieve the company’s global strategic objective of “five years of hard work to lead the future with the first-move advantage,” as expressed in the announcement.
Source: AgroPages
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