UPL Potential Merger with American Company - A simple analysis!

Описание: This video is in Hindi and covers the following topics:

UPL के promoters USA की company के साथ merger की option explore कर रहे हैं

Mumbai-based UPL, valued at around ₹55,000 crore, is one of the largest agrochemicals companies in the world.

The company produces industrial chemicals, chemical intermediates and specialty chemicals and offers crop protection solutions.

In 2018, UPL acquired Arysta LifeScience Inc. for $4.2 billion in a deal that transformed the company into one of the world’s largest generic agrochemicals firms.

UPL is currently overseen by octogenarian chairman and founder Rajnikant Devidas Shroff.

He started the business as a manufacturer of mercury salts at a British plant.

The chairman’s elder son, Jai, is the CEO of UPL, while his younger brother, Vikram, serves as a member on the company’s board.

UPL Ltd’s founding Shroff family is exploring a merger with at least two American firms—CF Industries Holdings Inc. and FMC Corp.—as part of the family’s plan to ensure a fair distribution of businesses and assets among its members, two people aware of the discussions said

CF Industries Holdings is a leading manufacturer of hydrogen and nitrogen products. Responding to an email from Mint, Chris Close, a US-based spokesperson at CF Industries, said, “CF Industries does not comment on market speculation.“

Philadelphia-based FMC Corp. is a global agricultural sciences firm that helps growers produce food, fibre and fuel apart from providing crop protection solutions. Replying to an email on a potential deal with UPL, FMC spokesperson Lars Weborg said, “FMC does not comment on industry rumours or speculation."

A spokesperson for UPL denied talks of a potential merger with FMC Corp. or CF Industries.

The two American firms are keen on expanding their footprint, and all the three companies are laying stress on ESG (environmental, social and corporate governance), clean energy and sustainability-oriented business processes

The promoters of UPL are considering several options but leaning towards a merger because it may fetch much better value for their 28.24% stake and public shareholders, one of the two people cited above said, seeking anonymity.

“A merger at this stage is likely to fetch at least a 15% premium to UPL’s current worth, which translates to around $8.9 billion or ₹63,000 crore—the largest deal in the agrochemicals space in Asia, if formalized

UPL has hired investment bank Evercore Group LLC to advise the promoters on the best option and whether a merger deal would benefit members of the promoter family and public shareholders. An email to Evercore Group remained unanswered.

Goldman Sachs, too, has been hired by one of the two American firms to explore a merger or takeover in India. A Goldman Sachs spokesperson declined to comment.

If the merger plan goes through, “the shortlisted entity (CF Industries or FMC) may own a majority stake in the merged entity while the Shroff family may hold a minority stake.

Since a large number of shares are held by public shareholders, UPL promoters plan to buyback of shares from the market to make any potential merger process easier

The board of UPL on Thursday approved a buyback proposal. The stock has gained about 3% since the buyback was announced.

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