Israel’s pioneering drip- and micro-irrigation company, Netafim, announced today that Mexican petrochemical firm Mexichem will acquire an 80 percent stake — all the shares of Netafim held by the Permira Fund and Kibbutz Magal and a portion of those held by Kibbutz Hatzerim – in a deal worth $1.516 billion.

Kibbutz Hatzerim, Netafim’s founder, will retain the remaining 20% stake. The total enterprise value of the transaction is $1.895 billion.

Founded in 1965, Netafim pioneered the drip revolution, creating a paradigm shift toward low-flow irrigation. Today it is the world’s largest irrigation company, with 2016 total sales reaching $855 million.

The transaction is subject to approval by Mexichem’s shareholders meeting and regulatory approvals and is expected to close during the fourth quarter of 2017.

Mexichem said it will retain Netafim’s current management and keep production and R&D in Israel for at least the next 20 years.

“Netafim has a long history of being at the forefront of creating smart solutions for the irrigation market. This acquisition will give Mexichem access to this smart technology which can be applied to heating and cooling, water management, Datacom, and other sectors, providing a platform from which to create smart industrial solutions around our existing product lines,” said Mexichem CEO Antonio Carrillo Rule.

“Netafim positions us to become a leading developer of solutions to address food and water shortages, and respond to the need of increase crop yields and meet higher sustainability standards for fertilization,” Carillo Rule added.

Headquartered in Tel Aviv, Netafim has a presence in more than 30 countries. It has 17 manufacturing plants, more than 4,300 employees and sales in more than 110 countries worldwide.

Netafim CEO Ran Maidan stressed that “the terms of the agreement guarantee Netafim’s continued Israeli character.”

“We are proud to have won the trust of a leading company such as Mexichem, and believe that together we will have an improved cost position and broader portfolio to support continued profitable growth and to extend our reach to new customers and geographies,” said Maidan.