Dow Chemical to divest part of Brazil ag business for $1.1bn
Stefan Baumgarten
12-Jul-2017
HOUSTON
(ICIS)–Dow Chemical has agreed to sell a “select portion” of
the Dow AgroSciences’ corn seed business in Brazil for $1.1bn
to CITIC Agri Fund, the US chemicals major said in a
statement late Tuesday.
The divestiture is intended to satisfy Dow’s commitments to
Brazil’s regulatory authority, the Administrative Council for
Economic Defense (CADE), in connection with CADE’s conditional clearance in May of
Dow’s planned $130bn merger with DuPont into DowDuPont.
The divestiture includes seed processing plants and seed
research centres, 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. The assets being divested had
revenues of about $287m last year.
Dow CEO Andrew Liveris said that the “strategic logic and
value creation potential” of the DowDupont
merger are being maintained, despite the
divestiture.
“The combination of our portfolios, even with this
divestiture, will create a much stronger agriculture company
with greater choice and innovation for growers around the
world,” Liveris said.
The divestiture in Brazil is in addition to
previously announced divestments of certain parts of DuPont’s
global crop protection portfolio and R&D pipeline and
organisation and Dow’s global ethylene acrylic acid
copolymers and ionomers business, in line with commitments
the companies made to the European Commission and other
regulatory agencies to obtain clearance for DowDuPont.
Meanwhile, Dow and DuPont continue to work with regulators in
the remaining jurisdictions to obtain clearance for
their merger, which was first disclosed in
December 2015, and they are making progress in
fulfilling requirements of the conditional approvals that
have already been received, Dow added.
The DowDuPont merger is still expected to generate cost
synergies of about $3bn and growth synergies of $1bn, and
both companies have reaffirmed their expectation to close the
merger in August 2017, with the intended spin-offs of
DowDuPont into three companies – material sciences,
agriculture and specialty products – to occur within 18
months of closing.
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