India’s UPL Draws Takeover Interest From Global Rivals
(Bloomberg) -- Indian agrochemical producer UPL Ltd. is attracting takeover interest from global competitors, people with knowledge of the matter said.
UPL has been speaking with advisers as it evaluates interest from rivals in the crop protection industry, according to the people, who asked not to be identified because the information is private. Potential suitors could include companies like CF Industries Holdings Inc. or FMC Corp., the people said.
Shares of UPL extended gains in Thursday afternoon trading, jumping as much as 5.1%, the biggest intraday rise in more than nine months. They were up 3.5% at the close in Mumbai, giving the company a market value of about $7.2 billion.
UPL offers a range of fertilizers and agricultural chemicals including herbicides, insecticides and seed treatments. It also sells other products used for stimulating plant growth, storing crops and conserving water as well as a line of disease-resistant seed varieties.
Deliberations are at an early stage, and there's no certainty UPL will decide to pursue a combination, the people said. It could also opt to pursue other types of tie-ups with overseas companies or focus on organic growth, the people said. A representative for UPL said the company denies the information, without elaborating. A spokesperson for FMC declined to comment. CF Industries didn't respond to requests for comment.
Wealth Transfer
Any deal could help UPL's controlling Shroff family divvy up its fortune and pass on wealth to the next generation, the people said. Shroff family members and related entities own about 28% of UPL, according to exchange filings.
UPL is currently overseen by octogenarian chairman and company founder Rajju Shroff. He was born into a family of entrepreneurs in the state of Gujarat in western India and pioneered a method of manufacturing mercury salts at a British plant before starting the company, according to UPL's website.
The chairman's elder son Jai Shroff, 56, is chief executive officer of UPL. Jai's younger brother Vikram serves as a member of the company's board.
UPL agreed in 2018 to acquire Arysta LifeScience Inc. for $4.2 billion in a deal that turned it into one of the world's largest generic agrochemicals firms. The company traces its roots back to 1969, when it was started as a manufacturer of red phosphorus used for striking matches.
©2022 Bloomberg L.P.
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