Glyphosate market changing dramatically, Jiangshan Agrochemical & Chemicals confirm end of acquisition of Fuhua Tongda

Date:12-10-2021

On the evening of 6th December, Jiangshan Agrochemical & Chemicals announced the end of the acquisition of Fuhua Tongda, concluding the major asset restructuring planned eight months ago. 

Regarding the reasons for the termination of the acquisition, Jiangshan Agrochemical & Chemicals said, in the announcement, that “due to the great market changes in the glyphosate industry since the second half of this year, and due to the major difference between current share prices and at the first board meeting when the decision was made, no current agreement was reached between the involved parties regarding the transaction. At this stage, there is uncertainty in terms of continuing the planned acquisition. So, it was decided to terminate this major asset restructuring.”

It was reported that this asset restructuring began on 29th March, 2021, the day when Jiangshan Agrochemical & Chemicals announced its intention to issue shares and pay cash to acquire a 100% stake in Fuhua Tongda. The company's stocks were suspended from 29th March for a period of no more than 10 trading days.

Fuhua Tongda is engaged in the research, development, production and marketing of herbicides (mainly glyphosate and glufosinate), as well as in supporting intermediates phosphorus trichloride and dimethyl phosphate. By the end of 2020, Fuhua Tongda head annual production capacity of 153,000 tons of glyphosate technical, 78,100 tons of methylal, 160,600 tons of methane chloride and 192,000 tons of disodium hydrogen phosphate. Jiangshan Agrochemical & Chemicals went public in 2001, mainly dealing with herbicides, insecticides, special chemicals, chemical intermediates, chlor-alkali and new material-based chemicals, as well as combined heat, power and steam research and development, production and supply. 

According to the initial plan, upon completion of the asset acquisition, Jiangshan Agrochemical & Chemicals would have a production capacity of over 295,000 tons of pesticides annually. Among the pesticides, glyphosate technical production capacity would reach 223,000 tons per year, placing the company in a strong position in the international agrochemical market. In addition, the two parties would have the opportunity to collaborate and allocate resources in the agrochemical industry, covering product optimization, industry deployment, supply chain setup, research, development and channel sharing.

As far as the termination is concerned, the company stated that it will not plan any major asset restructuring within at least 1 month from the date of this announcement, but its restructuring will continue.