China National Chemical Corp (ChemChina) has now signed the deal to buy 60% of Israel's MA Industries, it was announced on Sunday, China's latest move to expand in the global agricultural chemicals market.

The deal, which values the world's biggest maker of generic crop protection chemicals at $2.4 billion, will see MA's parent Koor Industries retain 40% of the maker of fungicides, pesticides and herbicides, Koor said on Sunday.

The companies had said on Dec. 28 that a sale had been agreed and the deal would be signed within two weeks.

As announced last month, ChemChina will buy the 53% of MA held by the public for $1.272 billion and pay Koor $168 million for another 7%. The price per share is $5.57 or 19.93 shekels a share at the present exchange rate.

As part of the deal, ChemChina will arrange a seven-year non-recourse loan of $960 million to Koor, which will be secured by Koor's shares in MA.

Analysts have said the loan guarantees for Koor a minimum price for the valuation of MA, since in seven years it can choose not to pay back the loan and forfeit the shares.

In October, Koor announced ChemChina was in talks to buy 70% of MA at a company valuation of $2.7 billion but a month later the Chinese company sought to reduce the valuation to $2.4 billion. The two sides also discussed ChemChina buying a smaller stake from Koor than originally planned.

Koor, which also owns 3.24% of Credit Suisse , is part of conglomerate IDB Holding Corp, which is controlled by businessman Nochi Dankner.

Strengthen Economic Ties
ChemChina President Jianxin Ren said on Sunday he and Dankner believed that together they can develop business opportunities in Israel, China and around the world.

"Our partnership has added significance because it can strengthen the economic ties between the State of Israel and the People's Republic of China in the fields of agriculture, chemical science and beyond," he said in a statement.

The deal, which is subject to various approvals, is expected to close in the second or third quarter.

"I am sure that the partnership between ChemChina and IDB will strengthen MA's global competitiveness and enable MA's manufacturing activity to remain in (the Israeli cities of) Be'er Sheva and Ashdod," Dankner said.

MA, which competes with Monsanto, Bayer and Syngenta, will become private.

ChemChina and Koor signed a shareholders' agreement under which ChemChina will appoint a chairman for MA and Koor will name the vice chairman. The companies also undertook to work towards a public offering of MA's shares.

ChemChina agreed to hold at least 51% of the voting rights in the company until a public offering and to remain its largest shareholder for a period to be determined.

The deal is the latest in a hungry China's search for global agricultural chemical production and distribution capabilities. ChemChina, a state-run company, had sales of $23 billion in 2010 and assets of $29 billion.

MA, also known as Makhteshim Agan, posted a wider net loss of $56.2 million in the third quarter, hit by a writedown at its Brazilian unit, rising costs and a one-off tax charge.