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Plant Health Care shares tumble as Arysta deal unwinds

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Plant Health Care has seen its share price drop sharply, as a deal to produce agricultural chemical products with crop protection group Arysta breaks up.

The two companies have terminated to use biological stimulants produced by Plant Health Care in combination products, citing weak crop prices.

Plant Health Care shares dropped nearly 15% on the news.

'Weak crop prices'

Plant Health Care ascribed the unsuccessful launch of the new product to "challenging conditions in agricultural markets driven by weak crop prices, especially in row crops".

The company also noted the "focus on the organizational merger of Chemtura AgroSolutions, Agriphar and Arysta LifeScience".

In 2015, Arysta LifeScience was acquired by Platform Specialty Products for $3.5bn, after terminating a planned floatation on the New York stock exchange.

Platform, produces specialty chemicals and provides of technical services, had previously bought Chemtura AgroSolutions and Agriphar Group.

Platform rolled the existing agricultural product groups into Arysta following the takeover.

Protein technology

The termination of the deal has ended product development on a product that was intended to combine Plant Health Care's patanted Harpin technology, as well as crop protection products made by Arysta, for application to row crops, such as soybeans and corn.

Harpin is a biological stimulant. The proteins in the product are also produced by plant pathogens.

Crops respond to the application of these proteins as if they were under attack from disease, activating defensive and growth responses.

Plant Health Care says that the defensive responses triggered by the proteins "help the plants survive the stresses and other threats the diseases present".

Brazil development

Plant Health Care restated its commitment to "accessing row crop markets in the U.S. with Harpin as both a straight product and in combination with mixture partners".

Arysta will continue to work with Plant Health Care on a specialist sugarcane application product.

According to the deal, signed a year ago, Arysta will evaluate the sugarcane protein technology for use in Brazil.

"Pending local registration and consistent, reliable test results in the evaluation program, first sales of the product are anticipated in the 2017 crop season," Arysta said at the time.

Shares fall

Plant Health Care also said that it would continue to "seek other opportunities for global collaboration".

Shares in Plant Health Care were down 12.6% at £74.75 in afternoon deals in London.

Platform Speciality products shares were down 0.1% at $12.32 in New York.

By William Clarke

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