Sumitomo Chemical Company Ltd. has executed a Memorandum of Understanding with Nufarm Ltd. regarding a proposed strategic investment in Nufarm by Sumitomo along with strategic cooperation in several areas of business.

In accordance with the MoU, Sumitomo and Nufarm will hold further discussions on possible areas of strategic cooperation across a number of business areas, such as co-distribution, joint R&D programs and seed-related businesses, with a view to formalize an agreement with Nufarm by Jan. 22, 2010.

Also, under the MoU, Sumitomo will make a public offer to acquire 20 percent of the issued shares of Nufarm. The MoU will take effect if approved by the Sumitomo board at a meeting scheduled Jan. 22, as well by the Nufarm shareholders at the shareholder meeting in early March, 2010.

Sumitomo’s crop protection business is one of its core businesses in its focused area of life sciences. Sumitomo expects the establishment of the comprehensive business tie-up with Nufarm, which is in line with Sumitomo’s long-term strategy, to strengthen its crop protection business.

Nufarm terminated discussions with Sinochem Corp. earlier this month in relation to its proposal to acquire all of the issued ordinary shares in Nufarm.

SOURCE: Sumitomo, Nufarm news releases.