Acquisitions likely in Israel

24 February 1997 00:00  [Source: ICB]

Acquisitions are set to follow the merger of Israel's agrochemical producers Makhteshim and Agan making it the world's largest generic crop protection chemicals producer. On completion of the alliance in May the company will have access to funds of up to $500m.

The two companies, both subsidiaries of Israel's Koor Industries, have increased 40% in value since the merger was announced in September 1996, while the Tel Aviv stock exchange has seen an average 30% rise in shares. Makhteshim is worth $470m and Agan is worth $172m, after Makhteshim's 46% stake in it is taken into account.

There has been a danger that in trying to raise capital the core ownership of Makhteshim would lose control and would have to sell some of its activities. A series of international acquisitions is likely to follow the pattern set in 1996 when the firms jointly acquired Brazilian company Desentar for $20m. Distribution company Aga Argentina was set up in September 1996, in July Spanish company Aragonesas was bought for $7m, and in February 1997, 49% of Brazil-based Herbitechnica was acquired.

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