CITIC Agri Fund buys part of Dow corn seed assets for $1.1b

Source:Reuters-Global Times Published: 2017/7/12 22:23:39

A Chinese fund part-owned by conglomerate CITIC has paid $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 germ plasm bank, the Morgan seed brand and a license for the use of the Dow Sementes brand for a certain period, Dow said on Tuesday.

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

The deal will boost China's share of the global seed business, which is being remade by mergers.

These include the $43 billion takeover of Switzerland-base Syngenta by State-owned ChemChina in China's largest foreign takeover.

ChemChina said recently that it wants to acquire 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, along with Chinese seed company Yuan Longping High-Tech Co and two other listed agricultural companies, according to CITIC's 2016 annual report.

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

Dow and DuPont announced the merger in 2015. Dow reaffirmed that the merger deal was expected to close next month, with the intended spin-offs to occur within 18 months of closing.

Posted in: COMPANIES

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