Shares in Makhteshim Agan Group soared more than 30% after the agrichemicals group revealed that it had become the latest farm-sector company to receive a Chinese bid, potentially valuing the group at $2.7bn.

Koor Industries, the biggest shareholder in Makhteshim Agan, which is better known as MA Industries, said it had reached an outline agreement on sell control of the farm sprays maker to state-backed chemicals giant ChemChina.

The deal valued MA Industries' stock at $2.72bn, equivalent to about 22 shekels a share, and a steep premium to the 13.40 shekels at which they closed last night in Tel Aviv.

The shares jumped to 17.55 shekels after the deal was announced.

Twin blows 

The agreement, which Koor stressed was based on "only preliminary understandings", follows a difficult period for MA Industries, the world's biggest maker of off-patent agrichemicals, which has suffered from the collapse in prices of generalist glyphosate weedkillers.

This market for this herbicide, whose branded names include Monsanto's Roundup, has suffered from a jump in production by generic chemicals groups - largely in China.

MA Industries suffered a further blow last month when plans to buy US rival Albaugh, and become bigger than DuPont in agrichemicals, collapsed.

For China, a deal would represent the latest of a string of attempts to buy abroad, with Sinochem reported currently to be attempting to put together a deal to buy Canadian fertilizer giant PotashCorp.

Sinochem failed last year in an attempt to buy Australian agrichemicals group Nufarm, while China Investment Corporation, China's $200bn sovereign wealth fund, has bought into Singapore commodities trader Noble, and seed company Agria become the top investor in New Zealand farm supplies group PGG Wrightson.

Deal smallprint

Under Monday's deal, MA would be taken off the Tel Aviv stock exchange and turned into a private group controlled jointly by ChemChina, with 70% of the shares, and Koor, with 30%.

This would require Koor, which currently owns more than 40% of MA, selling a stake of about 17% to the Chinese group, which would acquire the rest of its shares from other investors.

Koor would also have the option "for a certain period", to sell out at the valuation of $2.72bn, plus an annual increase of 20%.