BSM intends to acquire 80% of Generic for ¥348 million, and will be wholly owned after the transaction

BSM announced on October 20 that the company intends to pay cash to acquire 80% of Generic, with a transaction price of 348 million yuan. After the completion of the transaction, the company will directly hold 100% of the shares of Generic, and Generic will become a wholly-owned subsidiary of the listed company.

 BSM pointed that Generic is engaged in the international trade of pesticide products, and the export value of pesticide is in the leading level of domestic trading companies. After the completion of the transaction, it is conducive to the global layout of listed companies, to realize the expansion of listed companies from pesticide manufacturing to pesticide international export registration and sales direction, and to realize the extension of pesticide production to downstream sales channels.

Benefiting from the global pesticide production capacity transfer, China has developed into the world's largest pesticide production and exporter. At present, about 70% of the world's pesticide technicals are produced in China, and our pesticide products are exported to more than 180 countries and regions. According to the statistics of China's General Administration of Customs, 2000-2022 China's pesticide products herbicides, insecticides and fungicides exports from 145,300 tons to 192.72 million tons, the compound annual growth rate of 12.47%, but China's pesticide enterprises are mainly positioned in the manufacturing link, need to further extend to high value-added links. Further increasing the construction of overseas channels will become an important way for China's pesticide enterprises to digest production capacity and increase profits.

The main products of BSM are the technicals, intermediates and formulations of environmental protection, high efficiency and low toxicity pesticide Pendimethalin. BSM is a pesticide enterprise with the production and research capacity of the whole industrial chain of technicals, intermediates and formulations of Pendimethalin in China. The operating income from January to June in 2021, 2022 and 2023 was 530 million yuan, 768 million yuan and 363 million yuan, respectively.

In order to comply with the industrial development trend and enhance the company's sustainable operation ability, in recent years, the company has actively carried out capacity expansion and upstream and downstream business layout, and actively sought new business growth points. The target of this acquisition, Generic is a professional enterprise engaged in the international trade of pesticide products, the main business is the international export registration and sales of pesticides. The target company aims to sell pesticides, fungicides, herbicides and other pesticides in the international market. The company's business scope covers 79 countries and regions such as South America, Asia, North America, Europe and Africa, and its marketing network covers major markets around the world.

 According to the announcement, BSM intends to pay cash to purchase 80% of the shares of Generic, Prior to the transaction, the listed company held 20% of the equity of Generic, after the completion of the transaction, the listed company will hold 100% of the equity of Generic, and Generic will become a wholly-owned subsidiary of the listed company.

As an important target market for listed companies, the international market is also the direction of BSM's vigorous expansion. BSM said the acquisition will enable BSM to leverage the global distribution network of Generic to expand export sales to global markets. As a selective herbicide in dry fields, Pendimethalin is currently mainly used in Europe, Asia, North America and other regions, which are also the main regions of BSM export sales, "Generic deeply cultivates pesticide markets in South America, Africa and other places, can help BSM promote Pendimethalin products in developing countries in Latin America, Africa and other places, and serve the modernization of pesticides in developing countries. Increase the sales volume of Pendimethalin products and improve the overall profit level of listed companies.