Date
23 July 2017
Dow Chemical is selling the assets to meet conditions set by US regulators for its US$130 billion merger with DuPont. Photo: Bloomberg
Dow Chemical is selling the assets to meet conditions set by US regulators for its US$130 billion merger with DuPont. Photo: Bloomberg

CITIC fund buys Dow corn seed assets for US$1.1 billion

A Chinese fund part-owned by congolomerate CITIC Ltd. has paid US$1.1 billion for some of Dow Chemical Co.’s corn seed business in Brazil, in a further sign of China’s fast-expanding role in the global seed sector.

The deal includes seed processing plants and seed research centers, a copy of Dow AgroSciences’ Brazilian corn germplasm bank, the Morgan seed brand and a license for the use of the Dow Sementes brand for a certain period of time, Reuters reports, citing a Dow statement on Tuesday.

The assets, which generated revenue of about US$287 million in 2016, are being sold by Dow to meet conditions set by US antitrust regulators for its US$130 billion merger with DuPont.

The deal will boost China’s share of the global seed business, which is being remade by a series of huge mergers, the news agency said.

These include the US$43 billion takeover of Swiss firm Syngenta by state-owned ChemChina in China’s largest foreign takeover.

ChemChina said recently it is looking to snap up seed assets that rival Bayer must sell to gain regulatory approval for its takeover of Monsanto.

CITIC Agri Fund was founded in 2016 by CITIC Agriculture, a division of state-backed CITIC Ltd., along with Chinese seed firm Yuan Longping High-Tech Co. Ltd. and two other listed agricultural companies, according to CITIC Ltd.’s 2016 annual report.

CITIC Ltd., China’s largest conglomerate with interests in financial services to real estate and heavy industry, could not immediately be reached for comment.

The company made its first foray into the seed business in 2014, buying a majority stake in Yuan Longping High-Tech, one of China’s leading breeders of hybrid rice.

Yuan Longping High-Tech said that year it wanted to become one of the world’s top five seed companies.

Dow reaffirmed its all-stock merger with DuPont, announced in December 2015, was expected to close next month.

– Contact us at english@hkej.com

CG

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