Sinochem Bids $2.4 Billion For Nufarm

SYDNEY (AP) -- Sinochem Corp. has offered to buy Australia's Nufarm for $2.4 billion in China's second attempt to takeover the farm chemicals producer.

The proposed 2.8 billion Australian dollars ($2.4 billion) deal will be the latest to draw the scrutiny of Australian foreign investment regulators as Chinese state-owned firms seek to expand their investments in foreign companies. Of several such plans in Australia, some have run into trouble.

Nufarm, which makes herbicides, fungicides and other chemicals used in farming, said Monday it had entered into a nonbinding proposal for Sinochem to buy all of Nufarm's shares for AU$13 each, valuing the company at about AU$2.8 billion.

Nufarm's share price jumped more than 6 percent to AU$11.87 on Monday after a trading halt was lifted. Also Monday, Nufarm said its net profit for the year to July 31 had fallen 42 percent to AU$79.9 million ($70 million).

The company said in July that Sinochem had approached it about a potential takeover, but did not release details.

It was the second time China had approached Nufarm about a buyout. In 2007, a consortium led by China National Chemical Corp., or ChemChina, launched a bid calculated at the time to be worth about AU$3 billion, but the plan fell apart before it could be completed.

The latest deal requires approval from Australia's foreign investment review board and the government. Treasurer Wayne Swan has said he will only sign off on large foreign investment deals if they are in the national interest.

Australia's Defense Department cited security grounds last week when it vetoed Chinese investment in the proposed Hawks Nest Magnetite mine, which lies within in a military range in South Australia state. China Minmetals Nonferrous Metals Co. in March had to rejig its bid for Oz Minerals Ltd. because one of its mines was also within the military area. The amended deal, worth A$1.7 billion, was approved by shareholders in June.

Debt-laden Rio Tinto in June abandoned a $19.5 billion bid from China's Chinalco to increase its stake in the Anglo-Australian miner to 18 percent, a deal that met investor resistance and opposition from some politicians who said it was against Australia's national interest.

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