Narrative
Full Description
Project narrative
On October 25, 2005, Chinese state-owned chemical China National Chemical Corporation Limited (ChemChina) and China National BlueStar (Group) Corporation — a Chinese state-owned chemical manufacturer and wholly-owned subsidiary of Chinese state-owned ChemChina — signed a definitive agreement with private equity firm CVC Capital Partners Limited to acquire all of the outstanding shares in Drakkar Holdings S.A. — the Belgium-incorporated parent company of France-based animal nutrition supplement producer Adisseo France S.A.S. — by BlueStar for a cash consideration of €400 million EUR ($460 million USD; RMB 4 billion). On January 11, 2006, China Development Bank Corporation (CDB) entered into a €340 million EUR ($400 million USD) Foreign Exchange Loan Contract (ID#: 1100140012006510001) with China National BlueStar (Group) Corporation to facilitate BlueStar's acquisition of a 100% equity stake in Drakkar Holdings S.A. This loan carried a maturity period of approximately 11.666 years (maturity beginning from date of loan issuance) and a final maturity date of September 20, 2017. Then, on November 11, 2010, BlueStar, Adisseo France S.A.S., and CDB signed an Amendment Agreement (ID#1100140202010513602) to the original Foreign Exchange Fund Loan Contract. The amendment specified that the outstanding balance of the original loan at the time of the amendment, €280 million EUR, would become the obligation of Adisseo rather than BlueStar. BlueStar and Adisseo both committed to providing a pledge guarantee of all the shares of Drakkar Holdings S.A. held by them to CDB as collateral for this loan. On April 27, 2011, Drakkar Holdings S.A. was absorbed and merged by its subsidiary Drakkar Group S.A. Then, on November 12, 2012, Adisseo, BlueStar, and CDB signed an equity pledge agreement, whereby Adisseo pledged 100% of the equity of Drakkar Group S.A., including 1 share held by BlueStar, to CDB, until the debts were repaid. As of January 31, 2015, all debts under the CDB loan had been repaid. On October 14, 2005, the National Development and Reform Commission approved the acquisition. On November 14, 2005, the State Administration of Foreign Exchange approved the source of foreign exchange funds for the acquisition. On November 21, 2005, BlueStar's wholly-owned Hong Kong-incorporated subsidiary Bluestar International Investment Holding Ltd. was incorporated. On December 1, 2005, the Ministry of Commerce approved the acquisition and establishment of BlueStar International. On December 23, 2005, the State Administration of Foreign Exchange issued approval for ChemChina to provide an overseas entrusted loan of €399 million EUR to Bluestar International to complete the acquisition. The acquisition was completed on January 17, 2006 }. Bluestar International Investment Holding Ltd. (in 2010, renamed Bluestar Adisseo Nutrition Group Co., Ltd.) acquired Drakkar Holdings after BlueStar allocated the CDB funds to it via the Beijing Branch of Standard Chartered Bank via entrusted loans, with the collected interest paid to BlueStar being equal to the CDB interest rate. This was reportedly the first overseas acquisition by China's chemical industry and the largest ever merger and investment project by China in France to this point. The acquisition was motivated by a desire to develop methionine production and biological enzyme in China via the acquisition of Adisseo's technology. BlueStar hoped to use methionine technology to improve domestic methionine production, bring liquid methionine technology to China, form new production facilities, localize all levels of technology, production, and sales, and eventually produce 200,000 tons of methionine in China annually. CDB's loan was reportedly motivated by a desire to advance it in line with Chinese state industrial policy. CDB itself cited rural development in China as a motivator.
Staff comments
1. Drakkar Holdings S.A. held Adisseo France S.A.S. via wholly-owned subsidiary Drakkar Group S.A. Adisseo France was formed when Drakkar acquired Aventis's animal nutrition business in April 2002. Adisseo had four regional bases: Singapore, Atlanta in the United States, São Paulo in Brazil, and Antony in France. It had four principal production sites: Commentry and Les Roches-Roussillion in France, Burgos in Spain, and Institute in the United States. Adisseo designed, manufactured, and distributed nutritional additives for the animal feed sector, with its principal products being methionine (RHODIMET), vitamins (MIRCROVIT) and enzymes (ROVABIO) {{see ID#204361}}. Adisseo had a marketing network across 140 countries and regions and had 792 technological patents for methionine. It was the only producer to produce methionine in both powder and liquid form in the world and was the world's second largest producer of methionine, which was 29% of the global market share in 2004 {{see ID#204365}}.