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CHEMCHINA EYES MAKHTESHIM AGAN
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6 WWW.CEN-ONLINE.ORG OCTOBER 18, 2010 NEWS OF THE WEEK C HINA NATIONAL Chemical (ChemChina) is negotiating to buy Makhteshim Agan Industries, an Israeli maker of off-patent agricultural chem- icals, in a transaction that would value the company at $2.7 billion. If a deal is worked out, ChemChina would displace DuPont as the world’s sixth-largest producer of agricultural chemicals. Koor Industries, an investment company that now controls 47% of Makhteshim, says it has reached “preliminary principle understand- ings” on a transaction with the Chinese state- owned firm. Terms call for ChemChina to buy the 53% of Makhteshim shares now publicly traded and another 17% owned by Koor, giv- ing the Chinese company a 70% interest in Makhteshim. Koor would retain a 30% interest. “The deal would be hugely beneficial to the Chinese firm,” says consultant Gautam Sirur of U.K.-based Cropnosis. It would give ChemChi- na access to markets in Europe and Latin America where Makhteshim is strong. A transaction would also benefit Makhteshim by providing access to ChemChina’s finan- cial resources and a low-cost source of fungicides, insec- ticides, and weed killers. Adding Makhteshim’s $2 billion in 2009 sales to ChemChina’s crop protection sales of roughly $500 million would make the new entity the sixth-largest agricultural chemicals player, just ahead of DuPont but behind Monsanto, Sirur says. However, he notes, the deal faces at least one major hurdle: getting labor unions in Israel to agree to it. Separately, Makhteshim last month called off the acquisition of U.S. generic crop protection firm Albaugh in a $1.3 billion deal because of discrepancies it found in Albaugh’s records (C&EN, Sept. 6, page 30). That deal would have increased the Israeli firm’s access to U.S. and South American markets and lowered production costs. ChemChina’s move comes just as another state- owned Chinese firm, Sinochem, contemplates a bid for Canadian fertilizer producer PotashCorp. The two Chinese companies’ actions underscore the country’s efforts to internationalize its crop chemicals opera- tions. In 2007, ChemChina failed in an attempt to buy Nufarm, an Australian producer of generic agricultural chemicals, for $2.8 billion. Two years later, Sinochem made an unsuccessful $2.5 billion bid for Nufarm (C&EN, Oct. 5, 2009, page 12). —MARC REISCH T HE SUPREME COURT heard arguments last week in a dispute over whether a law designed to compensate families of children who have severe reactions to vaccine inoculations also shields drug man- ufacturers from most related product liability claims. The justices are considering an appeal by the parents of a Pittsburgh woman who want to sue Pfizer’s Wyeth unit over the seizures and developmental disabilities their daughter suffered allegedly as a result of the company’s diphtheria, tetanus, and pertussis (DTP) vaccine, which she received as a six-month- old baby in 1992. Robalee and Russell Bruesewitz initially sought compensation in 1995 but lost in a special court Con- gress set up to hear vac- cine-injury claims under the National Childhood Vaccine Injury Act of 1986. That panel said the parents had failed to show that the seizures were caused by the vaccine. The Bruesewitzes then filed a lawsuit against Wyeth based on Pennsylvania tort law. But in August 2007, the U.S. District Court for the Eastern District of Pennsyl- vania ruled that their claim was preempted by the 1986 law. In March 2009, the 3rd U.S. Circuit Court of Ap- peals in Philadelphia agreed. To help ensure a stable vaccine supply, the statute protects manufacturers from most lawsuits over vaccine-related injuries or deaths. Legal action is pre- empted “if the injury or death resulted from side effects that were unavoidable even though the vaccine was properly prepared and was accompanied by proper di- rections and warnings.” David C. Frederick, a lawyer representing the Brue- sewitz family, told the justices last week that the federal law does not bar all lawsuits, especially those filed when the harmful side effects were avoidable. He said a safer version of the vaccine existed, but Wyeth continued to market the riskier vaccine until 1998 because of costs. Manufacturers have a duty to provide “the safest possible products in light of what the science holds,” Frederick said. Wyeth lawyer Kathleen Sullivan coun- tered that Congress intended to preempt state-law claims because “the manufacturers were being driven out of the vaccine business, imperiling the nation’s vac- cine supply.” —GLENN HESS The Supreme Court heard arguments in a case brought by the Bruesewitzes on behalf of their daughter Hannah, center, who is diagnosed with residual seizure disorder. MICHAEL HENNINGER/NEWSCOM Together, ChemChina and Makhteshim Agan would be the sixth- largest agricultural chemicals maker. ISTOCK CHEMCHINA EYES MAKHTESHIM AGAN CROP PROTECTION: Deal would make Chinese firm a global player VACCINE LIABILITY LAWSUITS: Supreme Court will decide whether law protects drugmakers from claims over injuries
Transcript of CHEMCHINA EYES MAKHTESHIM AGAN
6WWW.CEN-ONLINE.ORG OCTOBER 18, 2010
NEWS OF THE WEEK
CHINA NATIONAL Chemical (ChemChina) is negotiating to buy Makhteshim Agan Industries, an Israeli maker of off-patent agricultural chem-
icals, in a transaction that would value the company at $2.7 billion. If a deal is worked out, ChemChina would displace DuPont as the world’s sixth-largest producer of agricultural chemicals.
Koor Industries, an investment company that now controls 47% of Makhteshim, says it has reached “preliminary principle understand-ings” on a transaction with the Chinese state-owned firm. Terms call for ChemChina to buy the 53% of Makhteshim shares now publicly traded and another 17% owned by Koor, giv-ing the Chinese company a 70% interest in Makhteshim. Koor would retain a 30% interest.
“The deal would be hugely beneficial to the Chinese firm,” says consultant Gautam Sirur of U.K.-based Cropnosis. It would give ChemChi-
na access to markets in Europe and Latin America where Makhteshim is strong. A transaction would also benefit Makhteshim by providing access to ChemChina’s finan-cial resources and a low-cost source of fungicides, insec-ticides, and weed killers.
Adding Makhteshim’s $2 billion in 2009 sales to ChemChina’s crop protection sales of roughly $500 million would make the new entity the sixth-largest agricultural chemicals player, just ahead of DuPont but behind Monsanto, Sirur says. However, he notes, the deal faces at least one major hurdle: getting labor unions in Israel to agree to it.
Separately, Makhteshim last month called off the acquisition of U.S. generic crop protection firm Albaugh in a $1.3 billion deal because of discrepancies it found in Albaugh’s records (C&EN, Sept. 6, page 30). That deal would have increased the Israeli firm’s access to U.S. and South American markets and lowered production costs.
ChemChina’s move comes just as another state-owned Chinese firm, Sinochem, contemplates a bid for Canadian fertilizer producer PotashCorp. The two Chinese companies’ actions underscore the country’s efforts to internationalize its crop chemicals opera-tions. In 2007, ChemChina failed in an attempt to buy Nufarm, an Australian producer of generic agricultural chemicals, for $2.8 billion. Two years later, Sinochem made an unsuccessful $2.5 billion bid for Nufarm (C&EN, Oct. 5, 2009, page 12). —MARC REISCH
THE SUPREME COURT heard arguments last week in a dispute over whether a law designed to compensate families of children who have severe
reactions to vaccine inoculations also shields drug man-ufacturers from most related product liability claims.
The justices are considering an appeal by the parents of a Pittsburgh woman who want to sue Pfizer’s Wyeth
unit over the seizures and developmental disabilities their daughter suffered allegedly as a result of the company’s diphtheria, tetanus, and pertussis (DTP) vaccine, which she received as a six-month-old baby in 1992.
Robalee and Russell Bruesewitz initially sought compensation in 1995 but lost in a special court Con-gress set up to hear vac-
cine-injury claims under the National Childhood Vaccine Injury Act of 1986. That panel said the parents had failed to show that the seizures were caused by the vaccine.
The Bruesewitzes then filed a lawsuit against Wyeth based on Pennsylvania tort law. But in August 2007, the U.S. District Court for the Eastern District of Pennsyl-vania ruled that their claim was preempted by the 1986 law. In March 2009, the 3rd U.S. Circuit Court of Ap-peals in Philadelphia agreed.
To help ensure a stable vaccine supply, the statute protects manufacturers from most lawsuits over vaccine-related injuries or deaths. Legal action is pre-empted “if the injury or death resulted from side effects that were unavoidable even though the vaccine was properly prepared and was accompanied by proper di-rections and warnings.”
David C. Frederick, a lawyer representing the Brue-sewitz family, told the justices last week that the federal law does not bar all lawsuits, especially those filed when the harmful side effects were avoidable. He said a safer version of the vaccine existed, but Wyeth continued to market the riskier vaccine until 1998 because of costs.
Manufacturers have a duty to provide “the safest possible products in light of what the science holds,” Frederick said. Wyeth lawyer Kathleen Sullivan coun-tered that Congress intended to preempt state-law claims because “the manufacturers were being driven out of the vaccine business, imperiling the nation’s vac-cine supply.” —GLENN HESS
The Supreme Court heard arguments in a case brought by the Bruesewitzes on behalf of their daughter Hannah, center, who is diagnosed with residual seizure disorder.
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Together, ChemChina and Makhteshim Agan would be the sixth-largest agricultural chemicals maker.
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CHEMCHINA EYES MAKHTESHIM AGAN
CROP PROTECTION: Deal would make Chinese firm a global player
VACCINE LIABILITY LAWSUITS: Supreme Court will decide
whether law protects drugmakers from claims over injuries
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