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Citic’s agri division acquires Dow’s seed ops
Posted on Wednesday, 12 July 2017 14:18
Dow Chemical is a step closer to meeting conditions laid out by US antitrust regulators with regards to the multi-billion deal with DuPont by selling its corn hybrid seed business in Brazil to Citic Agri Fund for USD 1.10 billion.
The assets on the block comprise processing plants and research centres, and a copy of Dow AgroSciences’ corn germplasm bank in the Latin American country.
Along with the Morgan brand, the divestment also includes a licence for the use of the Dow Sementes banner for a certain period of time.
Dow noted the assets generated revenue of about USD 287.00 million in 2016 and should satisfy commitments to Brazil’s administrative council for economic defence.
The company’s agricultural sciences segment provides crop protection and seed/plant biotechnology product, urban pest management and healthy oils.
Key product lines of this category included insecticides, fungicides and herbicides, among others, and competes with the likes of BASF, Bayer, Monsanto and Syngenta.
Dow’s agricultural sciences segment generated earnings before interest, tax, depreciation and amortisation (EBITDA) of USD 806.00 million on revenue of USD 6.17 billion in the 12 months ended 31st December 2016.
It booked EBITDA of USD 351.00 million on sales of USD 1.57 billion in Q1 2017.
In January 2015, the company acquired Cooperativa Central de Pesquisa Agrícola's seed business for USD 169.00 million in a deal expected to advance the development of an existing soybean programme.
CITIC Agriculture is a platform for state-backed Citic to invest in the agricultural industry; in January 2016 it become the largest and controlling shareholder of Yuan Longping High-Tech, a major Chinese grain to vegetable producer.
Last year the division, this majority-owned subsidiary and two other listed sector companies formed Citic Agri Fund to invest in the industry.
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