ChemChina transfers $2.4B for Makhteshim merger
Sale performed through Bank Hapoalim. Public shareholders to receive $1.272 billion; Koor to receive $1.128 billion, expected to pocket net profit of as much as NIS 675 million from deal
The deal for the merger of ChemChina and Makhteshim Agan has been completed. Calcalist has learned that ChemChina has transferred $2.4 billion to Israel, of which $960 million are a loan to Koor, which will receive an additional $168 million for 7% of its shares in the company.
The remainder of the proceeds – $1.272 billion – will go to the company’s public shareholders.
The entire payment has been transferred to Bank Hapoalim, which will hold the money in trust for the next few days. The closing agreement was made in Bank Hapoalim as well, and upon the finalization of the deal Makhteshim Agan and IDB Group, controlled by Nochi Dankner, together with ChemChina, the Chinese national chemical corporation, issued an official statement of the deal’s finalization.
Makhteshim Agan has also announced that it purchased the stock options of 130 of its employees as a prerequisite for the merger. Once the deal reached its final stages, Makhteshim was required as a prerequisite to the finalization of the deal to cancel all of the stock options held by its employees and executives.
The company will pay more than 130 employees and executives who held stock options NIS 73 million (about $20 million), of which NIS 16 million ($4.4 million) will be pocketed by Makhteshim CEO Erez Vigodman.
Makhteshim President and CEO Asia-Pacific, Africa & Middle East Ran Maidan will receive NIS 4.3 million ($1.18 million), and director of Global Resources and Corporate Development Chen Lichtenstein will pocket NIS 3.1 million ($850,000).
Koor announced that as a result of the deal, the company will post a NIS 582-674 million ($160-185 million) net profit for the fourth quarter of 2011, as well as an equity increase of NIS 655-747 million ($180-205 million).
IDB Chairman Nochi Dankner commented upon the deal’s completion, “The finalization of the strategic partnership agreement between ChemChina and IDB Group regarding Makhteshim Agan is an important milestone in IDB’s aspirations for global expansion and in the development of its global presence with a focus on China.
"The deal with ChemChina is an important step for IDB Group and Israel’s industry, and we believe it will be instrumental in forging economic relations between Israel and China – a country which is the main growth engine of the world’s economy.
"During a fascinating year of negotiations, I had the privilege and honor of working closely with my good friend Mr. Jianxin Ren, chairman of ChemChina, who is a leader with unique wisdom and business insight. He is an entrepreneur, a gifted negotiator and an individual with ideals who always sees the big picture while at the same time fully controlling the small details.
"We forged a particularly close friendship which contributed to the excellent cooperation between the ChemChina and IDB teams lead by Discount Investments President Ami Erel who with great intelligence helped lead the deal to it successful completion.”
Clal to invest NIS 140M in Givatayim project
In the meantime, Nochi Dankner’s insurance company, Clal Insurance, is negotiating over construction rights for 20,000 square meters (215,270 square feet) of office space in Givatayim in central Israel for its affiliate funds and nostro account, in a deal valued at NIS 120-140 million ($33-38 million), Calcalist learned.
The deal is for a lot in an area which is zoned for the development of a business center currently owned by the Strauss Group and by businessman Shaul Elovitch’s Eurocom.
A week ago is was revealed that Strauss was negotiating for the sale of its share of the property to an acquisition group headed by businessmen Gil Geva and Arye Bachar’s Tidhar. If the deal is signed, Elovitch will be a partner in the development project.
The property is valued at NIS 190 million ($52 million) and can be used to build an office building with a total area of 45,000 square meters (485,000 square feet) of office space. There is also an option of a residential area on another 10,000 square meters (107,640 square feet).
Estimates on the market are that Tidhar had already asked entrepreneur Kalman Sofrin, who headed BSR with Nahshon Kiviti some year ago, to come onboard.
Although insurance companies have been looking to diversify their investment portfolios in recent years, focusing on non-negotiable assets such as real estate, they tend to focus on yield bearing property which is considered less risky than residential property or investing in real estate entrepreneurship.
In this sense, the present deal is somewhat different in that although the sellers are obligated to provide Clal with a fully occupied office building, Clal will have to wait until Tidhar completes construction and the leasing, as oppose to other deals in which insurance companies typically acquire a fully constructed and fully occupied office building, thus the present deal has a higher risk profile than usual in this kind of deal.
Clal declined comment.
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