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Shares of agrochemicals company UPL Ltd jumped 8 per cent to Rs 593.2, highest in two months, on Arysta deal.
UPL Corp, a wholly-owned subsidiary of Indian agrochemicals major UPL, has signed an agreement to acquire Arysta LifeScience and its subsidiaries from NYSE-listed Platform Specialty Products Corp for about $4.2 billion in an all-cash-deal. The deal will help UPL further strengthen its position as a global leader in crop protection with $5 billion in sales.
Kotak says that the Arysta deal will cement UPL's position in the top 5 global agrochemical players. The brokerage has cut the target price to Rs 640 from Rs 850 on valuation, saying the target multiple (12x FY20 EPS) is in line with top global agrochemical players.
Investec says there is a buy opportunity on deal on synergies. UPL has outlined annual cost synergies of $200 million. Of the 27 analysts covering the stock, 24 rate it “buy” or higher, and 2 have “hold”, according to TR data.
UPL stock had fallen 28 per cent YTD as of last close vs a 4.5 per cent rise in the Nifty 50 Index over the same period.
( With inputs from Reuters )
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