Advanta Seed Company to Merge with Parent Company, UPL
As part of a strategy to consolidate the provision of its agri-solutions under a single umbrella for improved value to shareholders, major agrochemical company, Mumbai-based UPL, has announced that the group’s seed company, Advanta, will merge with itself. The merger will result in an expansion of UPL’s geographical presence and a yearly cost savings of Rs90 cr (US$13.56 million).
Prior to the deal, UPL held a 48.44% stake in Advanta, and subsequent to the merger, all Advanta shareholders will be granted UPL shares on a one to one basis. Advanta resident shareholders, however, will receive three optionally redeemable convertible preference shares in UPL for every one Advanta share, and non-resident Advanta shareholders will receive three compulsory convertible preference shares in UPL for every share of Advanta according to VC Circle.
The simplified structure of the group achieved through the deal and the resulting accelerated growth are expected to provide “sustainable shareholder value,” according to UPL chairman, RD Shroff, who told VC Circle, “This is a significant step in our goal to be among the largest agrochemical and seed companies globally.”
UPL is ranked as the 11th largest agrochemical company in the world, with 28 manufacturing sites across nine countries, generating revenue of US$2 billion in 2014.