Makhteshim Agan Group's attempt to buy US rival Albaugh for $1.3bn have collapsed after more than two months, amid accusations of "material gaps" in the American group's accounts.
Makhteshim Agan, better known as MA Industries, said that talks had been broken off after due diligence of Albaugh books revealed "various findings…. which constituted a material deviation from the data" which the company relied on when entering an outline deal agreement in June.
Erez Vigodman, the MA chief executive, said: "We have taken the right decision given the material gaps which emerged during the due diligence process."
The company did not detail its findings.
'Unacceptable changes'
Iowa-based Albaugh, however, blamed the deal's failure on MA Industries' insistence on "unacceptable" changes to terms set down in the outline deal documentation
"After months of negotiations, in the last few days Makhteshim Agan demanded changes in terms and conditions," the group said.
"As a result, the parties agreed to terminate negotiations."
Dennis Albaugh, the chairman and sole owner of Albaugh, added: "Makhteshim Agan attempted to force major changes to the transaction at the 11th hour."
Profits slide
The collapse of the deal thwarts MA Industries' plan to use it to extend its lead as the world's biggest maker of generic crop sprays, in the face of mounting competition from China, and reduce its reliance on European and domestic markets.
The company, which in June described Albaugh's operations as "top notch", has seen growth in particular in emerging markets as a means of combating the slump in world prices of glyphosate, the broad weedkiller which Monsanto sells as Roundup, which have been depressed by soaring Chinese production.
Indeed, analysts at Standard & Poor's in July highlighted the growing exposure to glyphosate that the deal would give to MA Industries in a warning that it may downgrade the group's credit rating.
Albaugh slipped from earnings before interest, tax, depreciation and amortisation (ebitda) of roughly $140m in 2008 to an ebitda loss of some $45m last year, as revenues slumped by 39% to $937m, an MA filing showed.
MA's own ebitda fell by 52% to $217.7m last year, on revenues down 12.7% at $2.21bn.
MA Industries shares closed down 1.7% at 13.03 shekels in Tel Aviv.
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