Sinochem talks with Oz's Nufarm on possible takeover

Jul. 29, 2009 (China Knowledge) - Sinochem Corp, the country's leading chemicals trader, has confirmed that it is in preliminary talks on a possible takeover of Australian agricultural chemical group Nufarm, sources reported.

Sinochem said that the two companies are in the early stages of negotiation and have not reached any agreement but that the company will publish an announcement when substantive progress is made.

The company has hired the Royal Bank of Scotland Group Public Ltd Co to provide consultation, while Nufarm has chosen JPMorgan as its financial consultant, the source said.

The Chinese chemicals trader hopes to expand its market share in herbicides and insecticides and to gain a foothold in the Australian and U.S. markets when demand recovers.

Nufarm, which has manufacturing facilities in 14 countries and sells its products in over 100 countries, has a market value of A$2.43 billion.

The talks mark the second attempt by a Chinese company to purchase Australia's biggest farm chemical supplier in two years. China National Chemical competed with two U.S. private equity firms to acquire Nufarm for A$3 billion for in 2007. However, the attempt was unsuccessful.