Another big-ticket global acquisition by an Indian company is brewing. United Phosphorus and Tata Group enterprise Rallis India are in the race to acquire the world's largest privately held crop protection and life sciences firm, Arysta LifeScience Corporation, from private equity firm Olympus Capital Holdings.
Sources close to the development said these two Indian companies were among the six contenders for the Tokyo-based firm. The acquisition is expected to cost nearly $2 billion (Rs 8,200 crore), or nearly double Arysta's turnover of 124.1 billion yen (Rs 4,400 crore) last year.
Other bidders include an Israeli firm, Australia's Nufarm and Blackstone, the global private equity fund.
"Six companies have been invited to submit their non-binding bids. A decision on the sale of Arysta is expected by the end of October," said a banker in the know of the developments.
Arysta's global peers such as Swiss agro-chemicals company Syngenta, Bayer's Cropscience and Monsanto are not in the race.
A Rallis India spokesperson said the company would not like to comment on market speculation. JR Shroff, director, United Phosphorus, could not be reached for comments.
Olympus has put Arysta on the block and has appointed investment banks Goldman Sachs and Lehman Brothers for the sale. It had bought 8.7 per cent of Arysta in 2002 for around $80 million (Rs 320 crore). Since then, it has been gradually building up its stake.
Industry sources said whoever bagged Arysta would gain access to its 150 products in more than 125 countries worldwide.
However, the financial strength of the domestic companies may not be enough to match the seller's expectations. United Phosphorus, which has been on an overseas shopping spree for the last few years, will have to stretch its balance sheet to seal the bid.
On the other hand, Rallis would have to bank on the Tata Group's reputation and balance sheet to clinch the deal, sources added.<hr>
The Arysta Equation
- World's largest privately-held crop protection and life sciences company.
- Turnover of 124.1 billion yen (Rs 4,400 crore) in 2006.
- Markets over 150 products in 125 countries.
