China's growth as a force in the global seeds industry took
another step forward as the country's Citic Agri Fund paid $1.1bn for Brazilian
assets sold by Dow Chemical to meet anti-trust concerns over its merger with
Dow Chemical said that it had signed a "definitive agreement"
to sell Citic Agri Fund Brazilian corn seed operations including processing
plants, research centre, the Morgan seed brands and a copy of the US group's
Brazilian germplasm bank for the grain.
The assets sold generated revenues of $257m last year, out
of total Dow agriculture division sales of $6.17bn.
And it represents a further strengthening by China of its position
in the world seeds market a grip strengthened signally by Chemchina's $43bn
purchase of Swiss-based Syngenta, the largest foreign takeover by a Chinese
At a smaller level, Origin Agritech revealed in December it
had become the first Chinese biotech seed company to export genetically
modified corn seeds to the US, for field tests taking place this summer.
The purchase by Citic Agri Fund comes a year after the fund
- which is aimed at investing "in the core value of agriculture" - was
established by the farm arm of Citic, the state-backed congolomerate, along with
three listed Chinese agricultural companies.
These companies include Shenzhen-listed Longping High-Tech Agriculture,
in which Citic Agriculture acquired a controlling stake early last year.
Shares in Longping High-Tech Agriculture, which also on
Wednesday unveiled a 25.5m-yuan investment in a rice research institute in
Nanjing, closed at 23.90 yuan, their highest finish in 18 months.
'Advances the approval
Andrew Liveris, the Dow Chemical chairman and chief
executive, said that the asset disposal "advances the regulatory approval
process" for its merger with DuPont, which will see the group's combined ag operations
spun off as a separate company.
"The combination of our portfolios, even with this
divestiture, will create a much stronger agriculture company with greater
choice and innovation for growers around the world," Mr Liveris said.
Dow added that even factoring in the Brazilian asset sale, the
merger with DuPont which both groups were committed to closing next month -
was on course to generate cost synergies of $3bn.
The asset disposal was demanded by Brazilian antitrust
regulator Cade as a condition of its approval for the Dow-DuPont tie-up.
Cade had warned that the merger "engenders a high
concentration in the markets related to
crop protection products, mainly
insecticides and herbicides used in several crops; and corn seeds, including
the development of transgenic seeds".