Chinese Biotech Firm Looks to Acquire 36% Stake in Brazilian Corn Breeding Assets
Tang Shihua
/SOURCE : Yicai
Chinese Biotech Firm Looks to Acquire 36% Stake in Brazilian Corn Breeding Assets

(Yicai Global) Aug. 16 -- Chinese biotechnology group Yuan Longping High-Tech Agriculture Co. [SHE:000998] is looking to acquire a 36.4-percent stake in a Brazilian corn breeding firm from Dow Chemical Co. for as much as USD400 million in a bid to enhance its global breeding market competitiveness.

To get approval for a merger between Dow Chemical and EI du Pont de Nemours and Co. from Brazil's antitrust regulator, the Administrative Council for Economic Defense, Dow AgroSciences Industrial Ltda. and its affiliates spun off some Brazilian maize breeding assets from Dow Chemical, and CITIC Agri Investment Co. bought them for about USD1.1 billion, Yuan Longping High-Tech Agriculture Co. said yesterday.

Yuan Longping High-Tech and CITIC Modern Agriculture Investment Co. are among the founders of CITIC Agri Investment Co.'s parent, CITIC Agri Fund Management Co., and hold 38-percent and 28-percent stakes, respectively.

The corn breeding assets include the exclusive right to use Dow's Brazilian maize germplasm resource database, a breeding research center, a seed processing plant, the Morgan seed brand and the right to use the Dow Sementes brand for a specified period. These assets generated about USD296 million in revenue last year.

After the divestiture, all the assets will be injected into a new company, Amazon Agri Biotech Hk Ltd. Longping High-Tech said it plans to subscribe USD400 million to a share placement by the new firm, increasing its share in the target assets -- held directly or indirectly -- to 36.4 percent.

The deal will help Yuan Longping High-Tech Agriculture Co. integrate breeding resources and boost the growth of the Chinese corn breeding industry.

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Keywords: Yuan Longping , Dupont , Dow Chemical , M&A , Corn , Brazil , Plant Breeding