September 8, 2014 / 7:15 AM / 6 years ago

Denmark's Auriga sells crop unit Cheminova to FMC Corp for $1.8 billion

COPENHAGEN (Reuters) - Auriga Industries AURIb.CO has agreed to sell its crop protection unit Cheminova to U.S.-based chemicals firm FMC Corp (FMC.N) for 10.5 billion Danish crowns ($1.8 billion), the Danish company said on Monday.

The price for 100 percent of Cheminova shares corresponds to a cash consideration of about 8.5 billion crowns adjusted for net debt, equalling 333 crowns per Auriga share, the company said. Its shares closed at 305 crowns on Friday.

The company said in July it was considering a sale of the unit. Debt financing of up to 720 million euros ($962 million) had been prepared for the sale, banking sources said Reuters.

Cheminova represents the only business of holding company Auriga, which is expected to de-list following the takeover by FMC Corp. Aarhus University is its largest shareholder, with a stake of just under 40 percent, according to Reuters data.

The deal is subject to approval by Auriga’s shareholders at an extraordinary general meeting, expected in October, and from relevant competition authorities. The transaction is expected to close in early 2015, followed by distribution of cash proceeds to shareholders in 2015, Auriga said in a statement.

Cheminova develops and supplies crop protection products to increase the yield and quality of crops for farmers. It says it has around 2-3 percent of the global market and operates out of more than 20 countries.

Cheminova’s earnings before interest, tax, depreciation and amortization (EBITDA) was approximately 110 million euros ($142 million), according to its website, making the sale price around 13 times its earnings.

Buyout groups EQT and CVC CVC.UL had made a joint bid to buy Cheminova in a deal that could have been worth about 1 billion euros ($1.3 billion), two sources familiar with the deal had previously told Reuters.

Reporting by Stine Jacobsen, editing by Louise Heavens

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