UPL announces group rejig to create world’s 2nd-largest listed pure-play crop protection firm

UPL, a Mumbai-based agrochemicals major, on Friday, February 20, announced a group restructuring plan to create the world’s second-largest listed pure-play crop protection platform.

In an exchange filing, the company said its board had approved a group reorganisation plan through a composite scheme of arrangement with the objective of unlocking value for its shareholders by the creation of an independent and focused crop protection platform.

As per the company, the reorganisation of the group will consolidate UPL’s India and international crop protection businesses through the scheme of arrangement.

The scheme, which involves UPL and its subsidiaries, including UPL Sustainable Agri Solutions Limited (UPL SAS), in which UPL holds a 90.91% stake, UPL Crop Protection Holdings Limited (UPL Corp), through which UPL holds a 77.78% stake in its international crop protection business, and UPL Global Sustainable Agri Solutions Limited (UPL Global), which is to be listed on stock exchanges.

Details of the scheme of arrangement

There will be three steps in the transaction.

In the first phase, there will be the amalgamation of UPL SAS into UPL. In the second phase, there will be a vertical demerger of India's crop protection business from UPL into UPL Global, and finally, in the third phase, there will be an amalgamation of UPL Corp (international crop protection business) into UPL Global.

As per the company, the transaction is expected to be completed within 12–15 months, subject to the timely receipt of regulatory and other required approvals.

Thus, the scheme of arrangement will create two listed entities: (i) UPL, an existing listed company as a diversified agriculture and speciality chemicals platform, and (ii) UPL Global as a dedicated crop protection platform.

"This will enable clearer value discovery by providing flexibility to the investors to select investments which best suit their investment strategies and risk profile," the company stated.

Besides, the restructure will simplify the group by consolidating the crop protection business into a single entity, enhancing synergies across research, manufacturing and market access, driving greater efficiency.

UPL further said that the scheme will consolidate UPL’s India and international crop protection businesses under UPL Global, creating a dedicated pure-play crop protection platform.

"The integrated business will benefit from UPL’s strong manufacturing base, advanced research capabilities, a robust global product portfolio and independent management," said the company.

“This strategic reorganisation is an important milestone in UPL’s long-term transformation journey. By unifying our India and international crop protection businesses under UPL Global, we are creating a future-ready platform with the focus, agility and innovation needed to lead in a rapidly evolving market," said Jai Shroff, Chairman and Group CEO of UPL.

“Bringing our crop protection businesses under one platform creates the world’s second-largest listed pure-play crop protection platform. With a presence in more than 140 countries, this unified platform will enable us to deliver innovations to farmers faster, more efficiently to gain greater market share. This will position us to strengthen operational synergies and drive long-term value for our stakeholders," said Mike Frank, CEO of UPL Global.

JM Financial Ltd. acted as financial advisor to UPL on its strategic restructuring, which involved the demerger of its global crop protection business into a pure-play company.

UPL share price ended 1.81% higher at ₹750.50 on the BSE on Friday.

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Disclaimer: This article is based on UPL's media release available on stock exchanges. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.