Fernz makes bid for French firm

06 September 1997 00:00  [Source: ACN]

NEW Zealand pharmaceutical and agricultural group Fernz and the French major Rhône-Poulenc (R-P) are wrestling for control of a Paris-based herbicide manufacturer.

The Fernz bid to seize a majority share-holding in Companie Francais De Produits Industriel (CFPI) is driven by the desire to further globalise its business.

To finance the attempted takeover, Fernz has sold two of its fertiliser plants in New Zealand. This generated a total of NZ$105m (US$72.5m), of which NZ$76m will be needed to win a controlling interest in CFPI.

Fernz, which already has a 45% stake in CFPI, is negotiating with R-P - a 32% shareholder. 'The negotations are at present leaning towards our company gaining a controlling interest, with R-P entering into a joint venture with us to handle CFPI's products,' said Fernz corporate secretary Trevan Smith.

R-P made it clear that it is only interested in three of CFPI's products, two herbicides and a growth regulator. 'We will make our position known on these negotiations later this week,' a spokesman said.

The Fernz sell-off of its fertiliser businesses means the 2.2m tonne/year New Zealand domestic market is now controlled by just two companies - Ravensdown Fertiliser Cooperative and Bay of Plenty Fertilisers (BOPF). Fernz sold its South Island New Plymouth plant to Ravensdown and its Whangerei works in North Island to BOPF. However, Fernz retained its 40% share in BOPF.

Production at New Plymouth, currently 200 000 tonne/year, will cease with Ravens-down stepping up manufacture at its Napier works which is presently only operating at 60% capacity. New Plymouth will be used as a blending plant by Ravensdown.

With only a small percentage market share - sales were FF1.2bn (US$2.1bn) last year - CFPI is important to Fernz for reasons other than size. If the takeover bid is successful, the New Zealand firm will be able to bring into play its Australian subsidiary Newfarm to help market the Paris company's products.

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