Syngenta buys Devgen, extending sector deal spree

A trickle of takeovers in the agrichemicals sector accelerated into a flood as Syngenta purchased Devgen, a plant genetics group, for a hefty premium in its second takeover in three days.

Syngenta, the world's biggest agrichemicals group, said it had offered E403m in cash for Devgen, a rice seeds and insect control group, and received approval from the board of the Belgian-based company and holders of 48% of shares.

The deal follows Wednesday's acquisition of Pastueria Bioscience, a biological pest control group with which Syngenta had, like Devgen, already announced a research and development tie-up.

On Thursday, industrial conglomerate BASF unveiled the $1bn takeover of US-based Becker Underwood, which owns a portfolio of biological controls including nematode worms which attack crop-damage insects, and bacteria which fight off deleterious fungi.

'Immense potential'

Davor Pisk, the Syngenta chief operating officer, said that the Devgen acquisition would "significantly reinforce our leading global position in rice", boosting its portfolio in a grain which represents a food staple for much of the world.

"Rice is critical to global food security and we expect to make a key contribution to improving productivity," Mr Pisk said.

On Devgen's insecticide applications, based on technology invoking so-called RNA interference, Sandro Aruffo, Syngenta's head of research and development, said there was "immense potential" in combining the group's products.

Rich premium

However, at a price of E16 per share, Devgen came at a premium of 70% to the stock's closing price on Thursday, and a level the stock had not reached since February 2008.

"There is a strong strategic rationale for this proposed acquisition. The proposed acquisition is an ideal fit for Syngenta," a Syngenta spokesman told

Devgen shares soared 69% to E15.89 in Brussels, factoring in a small discount to the offer price which is typical in takeover situations, to account for deal risk and the delay before shareholders stand to receive their pay-off from Syngenta.

Syngenta shares closed 0.2% lower at SFr343.90.

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