Mexican chemicals group, Mexichem, which manufactures plastic pipes, is set to buy 80% of shares in Israeli irrigation firm Netafim, the world’s biggest manufacturer of drip irrigation systems, for $1.5 billion.
The deal, which is subject to various regulatory permits, is expected to be finalised during the final quarter of this year. The deal is estimated to put Netafim’s value at around $1.9 billion.
Netafim pioneered the drip irrigation surge over forty years ago when they developed an agricultural system which was able to cut water usage by as much as 75%. Since then, the company has increased its range to include sprinklers, agricultural machinery, and pipes. Many of these products are smart devices, which are equipped with instruments to read the quality of the soil and the surrounding atmosphere. Sprinklers are then able to act accordingly via specially designed software.
Netafim has 17 production plants, three of which are in Israel. The company operates in over 30 countries, serving users around the world with sales in over 100 countries and employing around 4,000 people across the globe.
Ron Maidan, Netafim’s CEO, said in a statement that the deal would “ensure the continued Israeli character of Netafim”, following Mexichem’s commitment to preserve the company’s activity in Israel for 20 years.