(Corrects details of acquisition in second paragraph in story first published on Oct. 17.)
Oct. 17 (Bloomberg) -- Shares of Koor Industries Ltd., a Tel Aviv-based holding company, rose to a two-month high today after it completed its sale of a stake in Makhteshim-Agan Industries Ltd., the world’s largest maker of agrochemicals, to China National Chemical Corp.
ChemChina agreed on Dec. 28 to buy a 60 percent stake in Makhteshim that included part of Koor’s holding in an accord that valued the agrochemical company at $2.4 billion. Koor, which retained about 40 percent of Lod, Israel-based Makhteshim, said it will report a fourth-quarter gain of as much as 674 million shekels ($185 million).
The agreement gives Makhteshim access to low-cost production in China, while maintaining licenses and distribution agreements in Europe, said Amir Foster at Tel Aviv-based DS Securities & Investments.
“This could be a cash cow for Koor going forward,” Foster said.
Shares of Koor, which also has interests in telecommunications, rose 7 percent to 45.51 shekels, their highest since Aug. 4. Koor lost 47 percent in the past six months compared with a 15 percent drop of the benchmark TA-25 index as the holding company posted losses connected to the decline in value of its holding in Credit Suisse Group AG, Switzerland’s second-largest lender.
Discount Investment Corp., that controls Koor, also rose to a two-month high, gaining 8.8 percent to 39.20 shekels.
Israel is looking to Asia to increase trade as the U.S. and European Union struggle to recover from the global economic slowdown. “This is a big achievement for the Israeli economy,” Prime Minister Benjamin Netanyahu said in a text message.
Koor plans to pay Makhteshim shareholders a $45 million aggregate dividend as part of a settlement related to the sale, it said in a statement to the Tel Aviv Stock Exchange. The company gave Dec. 2 as the estimated payment date.
“This is one of those true win-win situations,” said Gilad Alper, analyst at Excellence Nessuah Investment House in Ramat Gan, Israel. “From a national interest this is fantastic news. Israel could benefit from China deepening its involvement in our economy.”
--Editors: Andrew J. Barden, Louis Meixler.
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