Nufarm Ltd. said Sumitomo Chemical Co. has agreed to buy a 20 percent stake in the company after Australia's largest farm chemicals supplier rejected a 2.6 billion Australian dollar (¥212 billion) takeover offer from China's Sinochem Corp.

Sumitomo Chemical will acquire the stake at A$14 a share, Melbourne-based Nufarm said Tuesday. That values the holding at about A$611 million and is priced 17 percent higher than Sinochem's revised proposal for the whole company.

Sumitomo Chemical, the world's ninth-biggest maker of agricultural chemicals, wants to expand sales in the industry and benefit from Nufarm's sales network in Australia, Europe and the Americas. Sinochem's revised bid was rejected by Nufarm after three months of talks, saying it undervalued the company.

"Sumitomo turned out to be the white knight waiting in the wings," Cameron Peacock, market analyst at IG Markets in Melbourne, said in an e-mailed statement. Nufarm's shares faced "getting smashed all the way back to the A$8 range had the board rejected the bid with no other suitors in sight."

The proposal was China's second attempt in as many years to buy Nufarm for its global distribution network for pesticides and herbicides. Nufarm signed an initial accord with Sinochem in September at A$13 a share, and the Chinese company cut the price to A$12 this month, without giving a reason.

"Sinochem's revised proposal is less attractive than the position which was agreed between the parties in September and does not provide certainty for Nufarm shareholders," Nufarm Chairman Kerry Hoggard said in the statement. "Sumitomo's proposal places an appropriate value on the company and provides all Nufarm shareholders with the opportunity to realize a fair price for some of their shares."

Sun Ding, a Beijing-based spokesman at Sinochem, wasn't immediately available for comment when contacted Tuesday.

Nufarm also plans to raise A$250 million selling shares to holders, which will be underwritten by UBS AG, the company said. It has refinanced about A$1 billion of debt, scheduled to be renewed by yearend, Nufarm said.

The sale of shares to Sumitomo Chemical, under an initial agreement, will be through a tender offer to holders, which will be subject to approval to be sought at a meeting in March, Nufarm said. The Sumitomo Chemical offer needs approval from its board, which is scheduled to meet Jan. 22, Nufarm said.

Nufarm, whose sales have doubled to A$2.6 billion since the start of the decade, is the biggest supplier of crop protection chemicals in Australia with about 45 percent of the market, spokesman Robert Reis said Sept. 28. In North and South America and Europe, the company's market share is in the range of 4 percent to 8 percent, according to Reis.

Sumitomo Chemical's crop protection unit has annual sales of $1.3 billion, with more than 40 percent of sales relating to insecticides, Nufarm said. The Japanese company already has approval from Australia's Foreign Investment Review Board for its proposed investment, Nufarm said.

"Nufarm is a first-class company with strong growth prospects and Sumitomo looks forward to identifying additional opportunities for cooperation," Sumitomo Chemical representative director and agriculture sector president Kenjiro Fukubayashi said in the statement.

Sinochem, established in 1950, is China's biggest integrated agricultural company selling fertilizer, pesticide and seed products. China National Chemical Corp., backed by buyout fund Blackstone Group LP, ended talks to buy Nufarm in December 2007 after a study of its accounts.

Nufarm reported a 42 percent drop in profit in September.