Cheminova and Bayer CropScience have signed a letter of intent concerning Cheminova’s acquisition of Bayer CropScience’s formulation and filling facility in the town of Wyong in New South Wales, Australia, roughly 100 kilometres north of Sydney. Closing of the transaction is expected in the 4th quarter of 2008 following finalisation of the definitive transactional agreements and of the relevant transitional steps.
Cheminova has since 2005 been represented in Australia through its subsidiary Ospray, with its main office in Sydney. Ospray will assume management responsibility for the Wyong facility.
Ospray is involved in sales and distribution of plant protection products but has hitherto not had its own production facility. With the incorporation of the Wyong facility, Ospray will henceforth enjoy a competitive advantage when catering to the large Australian market thanks to the supply reliability and flexibility as well as cost advantages that an own production facility will provide Ospray. The Wyong facility will hence contribute to the further expansion of Ospray’s sales and market position.
The Wyong facility is situated on a 5 hectare site at an industrial area
in the city of Wyong.
The Wyong facility has been operated by Bayer CropScience for over 20 years, during which time Bayer CropScience has made continuous investments in expansion and upgrading of the facility. As a result hereof, the Wyong facility is today an efficient and well-organised facility of a high technical and environmental standard. Roughly 30 full-time employees are employed at the site.
The facility produces a range of the most common formulation types in demand in the Australian market and handles a wide range of packaging types and sizes. One of the plants at the Wyong site is a specific-purpose plant for the amination and formulation of glyphosate – a product enjoying strong demand in the Australian market and a key product in Ospray’s product range. The Wyong facility is currently producing for both Bayer CropScience and other customers, and this will continue to be the case also in future, in addition to the volumes that the Wyong facility will produce for Ospray.
From 2009 and onward, the Wyong facility will generate stand-alone profits as well as contribute to a further strengthening of Ospray’s sales and earnings.
The parties have agreed not to release further details concerning the transaction.
June 23, 2008
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