Sector News

Bidding war could develop as KWS makes offer for Bayer's vegetable seeds business

May 29, 2018
Chemical Value Chain

A bidding war could be developing for Bayer’s vegetable seeds business followinga non-binding offer for the operation made by KWS, one of the world’s leading plant breeding companies.

Bayer needs to sell the business to gain antitrust approval for the acquisition of Monsanto and in April agreed to sell it to BASF. Bayer declined to comment on the news while BASF said that in April it signed a binding agreement to purchase Bayer’s entire vegetable seeds business, operating under the global trademark Nunhems. “BASF’s acquisition of the global vegetable seeds and other businesses and assets Bayer offered to divest in the context of its planned acquisition of Monsanto has already been approved by many regulatory authorities,” BASF says.

KWS said today that following publication on 25 May of the final commitments given by Bayer to the EU Commission, KWS on Monday issued a non-binding offer to Bayer for its global vegetable seeds business, which operates primarily under the name Nunhems. “KWS is thus renewing a non-binding bid it made in January 2018 and is offering Bayer and its shareholders attractive terms and conditions for the sale of the vegetable seeds business.” KWS tells CW that only conditional approval has so far been given by the EU. “There is still a review process [to see] if BASF is a suitable buyer.”

KWS is the fourth largest field seeds player, trailing Monsanto; Corteva, the DowDuPont unit; and Syngenta, but it is not present in vegetables seeds. “If Nunhems were acquired by KWS, the agricultural sector, farmers and consumers alike would benefit from the sale to an independent seeds company without an agrochemicals division,” KWS says. The company’s particular focus is on agricultural crops but it sees synergies with Nunhems. As a Dutch vegetable seed company, Nunhems would complement KWS’s existing portfolio and “would dovetail seamlessly into KWS’ corporate culture and its long-term [strategy].”

KWS tells CW that its offer is based on the same EBITDA multiple that Bayer will pay for Monsanto. This is “highly attractive to Bayer and its shareholders and very likely better than the amount BASF has to pay for the vegetable seeds business.” KWS says it is only interested in the vegetable seeds business, not in digital farming and the other assets that BASF agreed to acquire. KWS in fiscal 2016-17 generated sales of €1.08 billion ($1.25 billion) and earnings before interest and tax of €132 million. It employs 4,950 people.

On 26 April, BASF signed an agreement to acquire additional seeds and crop protection businesses and assets from Bayer, following its original deal in October 2017. These include Bayer’s entire vegetable seeds business, operating under the global trademark Nunhems, seed treatment products sold under the Poncho, VOTiVO, COPeO and ILeVO brands, the R&D platform for hybrid wheat and the complete digital farming platform xarvio. The all-cash purchase price for the additional businesses and assets BASF agreed to acquire is €1.7 billion, subject to certain adjustments at closing. For the full year 2017, sales of these businesses amounted to around €745 million.

By Natasha Alperowicz

Source: Chemical Week

comments closed

Related News

January 15, 2022

Neste brings liquefied plastic waste trial to successful conclusion for industrial-scale recycling

Chemical Value Chain

Neste is announcing the conclusion of its first series of trials into processing liquefied waste plastic with chemical recycling technology at its Porvoo refinery in Finland. The oil refining company says it has processed about 800 tons of liquefied waste plastic over the last two years – roughly the same amount generated annually by a European city with 500,000 people.

January 15, 2022

SIKA posts record sales for 2021 – growth of 17.1%

Chemical Value Chain

Sika performed well in a challenging environment in 2021. Despite the persistent COVID-19 pandemic and bottlenecks in the procurement of raw materials, sales rose significantly to a record CHF 9.24 billion, corresponding to growth of 17.1% in local currencies.

January 15, 2022

Ineos joins Nextloopp’s polypropylene recycling project for food-grade polymers

Chemical Value Chain

Ineos Olefins and Polymers Europe is joining the pioneering polypropylene (PP) recycling project Nextloopp, supporting its delivery of food-grade recycled content. The chemicals company will orchestrate a pivotal two-year project that will inform the building of a demonstration plant in the UK to produce 10,000 metric tons of recycled polypropylene (rPP) annually.

Send this to a friend