Kemira GrowHow to be sold to Norwegian Yara

State to collect more than EUR 200 million for holding

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According to a press release on Thursday, the State of Finland has sold all its stock - representing some 30 per cent of all shares - in Kemira GrowHow, one of the leading producers of fertilizers and feed phosphates in Europe.
      The buyer is the largest supplier of fertilizers worldwide, the Norwegian company Yara International ASA, as a cash transaction of EUR 208 million.
     
Yara will launch a mandatory tender offer for the remaining shares in the company at the same price of EUR 12.12 per share, which is over 30 per cent more than the company’s closing price per share on May 23rd. The offer price is also 17 per cent higher than GrowHow’s all-time high traded share price.
      The tender offer will value Kemira GrowHow at EUR 671.8 million on an equity value basis.
      When Kemira GrowHow was listed on the Helsinki Stock Exchange in October of 2004, the market price of its shares was EUR 5.25.
      Both the Chairman of the Kemira GrowHow Board, Ossi Virolainen, and the CFO of Yara International, Sven Ombudstvedt, are confident that the companies will obtain clearance for the transaction from the EU competition authorities.
     
Thanks to the insignificant overlap in operations, the combination of the two companies will be "strategically excellent", says Ossi Virolainen.
      Yara is a major global producer of fertilizers, while GrowHow’s operations focus on Europe, having gained a foothold even in the Russian and Ukrainian market.
      The combination of the two companies will create a strong, world-class company able to compete effectively in the global fertilizer market, Yara’s statement said.
      "Combining the global business approach of Yara and its nitrogen activities with Kemira GrowHow's platform within phosphate creates new opportunities in meeting our goals", comments CEO of Kemira GrowHow Oyj, Heikki Sirviö.
      Kemira GrowHow also owns a major phosphate mine at Siilinjärvi near the Finnish city of Kuopio, and has access to additional phosphate rock through mining rights at Sokli in Savukoski, in Eastern Lapland. These will provide additional capacity to Yara's phosphate-related capabilities.
     
Kemira GrowHow's Virolainen and Sirviö and even the Director of the State Ownership Steering Unit, Pekka Timonen, all regard the offer price as good, while some representatives of Finnish trade unions think that the State’s decision to sell its stock in a Finnish company is bound to give a wrong signal to potential investors.
Kemira Growhow posted net sales in 2006 of just under EUR 1.2 billion and recorded an operating profit of EUR 11.1 million.
      The company employs nearly 2,500 persons.
      Yara is 5-6 times the size of the Finnish firm, and the largest shareholder is the Norwegian Trade and Industry Ministry. Its core business is the production and marketing of nitrogen fertilizer such as urea and nitrates.


Links:
  Kemira GrowHow: Stock Exchange release (24.5.2007)
  Yara International ASA: Press release (24.5.2007)
  Government Communications Unit: State of Finland sells Kemira GrowHow shares (24.5.2007)

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