Orbia to Sell Israel's Netafim to Spain's MAT Holding in $1.2B Deal
Mexican corporation Orbia is selling Israeli drip-irrigation pioneer Netafim to Spain's MAT Holding at a $1.2 billion enterprise value. Kibbutz Hatzerim will reacquire a 10% stake, backed by financing from French fund Tikehau Capital.
Mexican corporation Orbia is finalizing a deal to sell its Israeli drip-irrigation pioneer, Netafim, to Spain's MAT Holding by the end of the year. According to sources, the transaction values Netafim at an enterprise value of $1.2 billion, which equates to an equity value of approximately $800 million after deducting $400 million in debt.
Under the terms of the advanced agreement, Kibbutz Hatzerim will acquire a 10% stake in Netafim for $80 million, representing roughly a quarter of a billion shekels. The remaining 70% of the shares will be purchased by MAT Holding and a European investment fund partnering in the transaction. Hatzerim previously sold a 12.7% stake in Netafim to Orbia in 2017 for $240 million, meaning the kibbutz is now reacquiring a significant share at roughly half that historical price.
Financial Backing and Fund Partnership
MAT Holding, a family-owned industrial group based in Barcelona, posted record sales of 429 million euros last year. However, given its scale and cash reserves, MAT cannot independently finance the acquisition of Netafim, which generates about $1 billion in annual revenue. Its share of the transaction amounts to $560 million.
To bridge the funding gap, MAT is negotiating with Tikehau Capital, a major French investment fund managing tens of billions of euros. Tikehau will inject hundreds of millions of euros into MAT, securing equity in the Spanish company. Upon completion, Tikehau will hold approximately a 35% stake in Netafim—similar to MAT's share—while Kibbutz Hatzerim will control 30%.
Overcoming Regulatory Hurdles
Orbia acquired control of Netafim in August 2017 from private equity firm Permira and Israeli kibbutzim, paying an enterprise value of $1.9 billion. However, under Orbia, Netafim represented just 15% of the Mexican conglomerate's operations, leading to reduced management focus and declining investments in research and development.
Prior to reaching terms with MAT, Orbia explored a potential sale to a young Chinese billionaire, Haoyu Wang, backed by the HOPU investment fund, at a valuation of $1.4 billion. Those talks ultimately collapsed due to insurmountable U.S. regulatory hurdles. Because Netafim generates roughly a quarter of its revenue—around $250 million annually—in the United States, American authorities would have subjected the Chinese acquisition to strict scrutiny, making clearance virtually impossible.
Deep Israeli Roots and Global Synergy
MAT Holding is no stranger to Israeli industry. In 2014, its subsidiary Regaber acquired Dorot Control Valves from Shari Arison for 105 million shekels, later adding A.R.I. Kfar Haruv. These assets were eventually merged into Aquestia, a global leader in water management systems.
Netafim remains the world's largest drip-irrigation provider, operating 19 manufacturing plants, two recycling facilities, and employing 5,000 people globally under CEO Gabi Miodownik. The partnership with MAT is expected to leverage deep industry synergies to counter rising global competition from rivals like Rivulis, Jain Irrigation, and low-cost Chinese manufacturers, expanding market reach across Europe, the Americas, and Asia.
