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UPDATE 1-Mexichem to take over Israeli irrigation firm Netafim in $1.5 bln deal

deal@ (Adds details, Mexichem CEO quote)

JERUSALEM, Aug 7 (Reuters) - Mexican chemical firm Mexichem has agreed to buy an 80 percent stake in Israeli irrigation firm Netafim in a deal valuing the company at $1.895 billion, Netafim said on Monday.

Mexichem will pay some $1.5 billion, acquiring a 61 percent stake owned by private equity firm Permira, which bought into Netafim in 2011, before it roughly doubled in value.

Another 6 percent will come from Israel's Kibbutz Magal and 13 percent from Kibbutz Hatzerim, which will remain a minority shareholder with a 20 percent stake.

The deal is expected to close in the fourth quarter of 2017, subject to various approvals.

Netafim, which pioneered drip irrigation technology, has 17 manufacturing plants and 4,300 employees worldwide. Its sales in 2016 totalled about $855 million.

The company said in March it had hired Goldman Sachs to handle a possible sale and several groups had expressed an interest.

"The acquisition will give Mexichem access to advanced technology that can be used as a base for 'smart' solutions in other industrial fields," Mexichem Chief Executive Antonio Carrillo Rule said in a statement in Hebrew issued by Netafim. (Reporting by Ari Rabinovitch; Editing by Steven Scheer, Greg Mahlich)