Sumitomo Chemicals and Excel Crop Care to merge

Agrochemicals maker Excel Crop Care Ltd. has said that its board has approved a plan that will see its present owner Sumitomo Chemicals India Pvt. Ltd. reverse merge with the company to become a listed entity.

Sumitomo Chemicals India, along with another group entity, currently owns 65% stake in Excel Crop Care Ltd. Sumitomo acquired the stake from the Shroff family in 2016.

Shareholders of Excel Crop Care will get 51 shares of Sumitomo Chemicals India for every two shares they hold. Sumitomo will hold an 80% stake in the newly listed company, once the process is completed.

Excel Crop Care reported revenues of Rs. 1,190-crore in FY20, while Sumitomo Chemicals India reported a topline of Rs. 870.6-crore in the same period. “Consolidation of businesses shall create greater operational synergies and efficiencies at multiple levels of business operations and shall provide significant impetus to their growth,” the statement said.

Strong rationale

There is a strong rationale for the merger:

Highly complementary nature of businesses – Excel with 100% focus on generics, and Sumitomo’s 63% focus on proprietary (speciality) products;

Opportunity to boost sales through co-selling and by leveraging the expanded distribution network of more than 13,000 distributors across India;

Operational synergy in research, development and launch of new products.