Australian crop protection firm Nufarm has entered non-binding talks to sell itself to a major Chinese ag input manufacturer.

Sinochem, a Beijing-based state-owned firm billed as the largest integrated agribusiness in China, running fertilizer, pesticide and seed operations, has proposed a “scheme of arrangement” worth A$13 per Nufarm share, valuing the company at about A$2.83 billion.

The two companies on Monday announced a heads of agreement (that is, draft guidelines for a future deal) in which Nufarm will work exclusively with Sinochem until Dec. 3, negotiating a “transaction implementation agreement.”

That time period includes five weeks in which Sinochem will run due diligence on Nufarm’s operations, the companies said.

If the negotiations come to a transaction implementation agreement, Nufarm said its board “intends to unanimously recommend the proposed acquisition, in the absence of a superior proposal and subject to an independent expert finding that the proposed scheme is in the best interests of Nufarm shareholders.”

Such an agreement would also be subject to Australian and Chinese regulatory approvals, Nufarm shareholders’ approval and court approval, Nufarm said Monday.

The Sydney Morning Herald on Tuesday noted that Sinochem’s bid is estimated at A$3.8 billion if debt is included. That would make Nufarm the biggest merger and acquisition agreement by China in Australia.

Herald writer Clancy Yeates also noted that as the first big non-mining Chinese investment in the country, Sinochem’s bid may also serve as a “test case” for Australia’s Foreign Investment Review Board (FIRB).

FIRB recently indicated it preferred joint ventures to outright takeovers by Chinese state-owned firms, Yeates wrote, but added that unlike many mining firms, much of Nufarm’s business is conducted overseas and only about six per cent of it is in Asia, let alone China.

Yeates quoted Nufarm CEO Doug Rathbone as saying there had been no discussions with FIRB. Rathbone, a major shareholder in Nufarm, was also quoted as saying he’d been in talks with Sinochem about remaining Nufarm’s chief executive.

The Herald detected some skepticism, however, on the part of investors. Nufarm (NUF:ASX) closed trading Tuesday at A$11.45 per share.

Also, the Herald noted, this isn’t the first time a Chinese firm has made a play for Nufarm, citing a 2007 takeover bid by a consortium that offered A$17.25 per share but walked away after a similar period of due diligence and exclusivity.

Nufarm has operated in Canada through a subsidiary, Nufarm Agriculture Inc., since 1998. Headquartered in Calgary, the company has built up a market presence through sales of generic off-patent herbicides while also acquiring rights to older “name” brands such as Assert, Achieve and Curtail M.

–– The “Editors’ Picks” feature will highlight eyebrow-raising and unusual-yet-true news from the world of farming, as gleaned from various sources by the editorial staff of the Farm Business Communications division. Dave Wreford is the retired editor of Country Guide.

The post Editors’ Picks: Chinese firm eyes Nufarm takeover appeared first on Canadian Cattlemen.

In an article Thursday in the online edition of The Mercury, Tasmania’s largest-circulating daily newspaper, reporter Damien Brown quoted Attorney-General Lara Giddings as saying the circles are created by wallabies, found hopping around in circles, high on the poppy heads they’ve consumed.

“The one interesting bit that I found recently in one of my briefs on the poppy industry was that we have a problem with wallabies entering poppy fields, getting as high as a kite and going around in circles,” Giddings said during a budget hearing for the Australian island state’s government.

“Then they crash. We see crop circles in the poppy industry from wallabies that are high.”

Giddings, Brown wrote, was addressing a budget hearing on the topic of security and theft in the state’s poppy fields.

The island’s poppy stocks are considered some of the safest in the world, but a total of almost 2,300 poppy heads have been stolen during the last financial year, in 17 separate thefts, The Mercury said.

Tasmania, the newspaper explained, is the world’s largest producer of opium for the pharmaceutical market. About 500 farmers on the island grow opium poppies legally to supply about half of the world’s raw material for morphine, codeine and other pharmaceutical opiates.

Rick Rockliff, field operations manager for Westbury-based Tasmanian Alkaloids, said wildlife and livestock, such as deer and sheep, have been known to “act weird” after consuming poppy heads.

The company, which supplies poppy farmers with seed and other inputs and buys their production for the pharmaceutical market, tries hard to prevent livestock from consuming poppies, not only to prevent crop damage but to avoid the risk of contaminating meat, he said.

Growers, Rockliff told the newspaper, “take this very seriously but there has been a steady increase in the number of wild animals and that is where we are having difficulty keeping them off our land.”

Poppies, according to Tasmanian Alkaloids’ website, are grown on a three-year crop rotation cycle, seeded in spring (September) and harvested in mid-summer (February). After harvest, poppy seed is separated and marketed to the spice trade. Alkaloids are removed from the plant material to form a concentrate for pharmaceutical use.

The post Editors’ Picks: Stoned wallabies bedevil Tasmanian farms appeared first on Canadian Cattlemen.