Dow sells off herbicide line, amid sector shake-up
Dow sells off herbicide line, amid sector shake-up
Dow Chemical Co is selling off part of its herbicide business amid continued talks of consolidation in the ag-chemical sector.
Dow will sell off its line of dinitroaniline( DNA) herbicides to Gowan Company, for an undisclosed sum.
The deal will include the trademark for Treflan, a herbicide that is used on a wide range of field crops including maize, cotton, and some fruits and vegetables.
Gowan will also take on a formulation and packaging facility in Alberta, Canada.
Dow ' s farm chemicals and seeds unit has seen falling sales, and the company is reported to have already been involved in talks over the possible sale of the entire segment, just one of a slew of merger and acquisition rumours circulating in the ag-chemical sector.
Tighter belts
Falling crop prices have led to squeezed farmer incomes, which is hitting demand for agricultural inputs, such as seed, fertiliser and crop protection chemicals. wake of the rejected Monsanto bid.
As well as the Monsanto offer, the third such bid this year, Syngenta has rejected a $ 42bn offer from the Chinese stateowned China National Chemical Corp, while German chemical group BASF is reported to have sought financing for a Syngenta deal.
The Wall Street Journal has carried reports that Syngenta was in takeover discussions with DuPont as well. Elsewhere in this issue we cover the Dow / du Pont story.
Active discussions
In an interview with in November, Syngenta chairman Michel Demare said that merger and acquisition conversations in the industry were " extremely active ".
" This is the result of the Monsanto approach for Syngenta, which for sure has shaken the whole industry... It has created the huge activity in which everyone is speaking to each other," Mr Demare said. " We are all convinced that the sector will look quite different in six months."
Failed takeover approaches made by Monsanto to Syngenta earlier this year have sparked a febrile atmosphere in the sector.
Syngenta discussion
In November the Monsanto executives told investors the company still had its eye on Syngenta, and expressed confidence that the sector would see major shakeups over the coming months. Syngenta ' s chief executive Mike Mack stepped down last month, in the
New product investments
The herbicide business to be acquired by Gowan operates in the USA, Canada, Japan, Australia and parts of Europe. Ramiro De La Cruz, vice president of crop protection for Dow AgroSciences, said the company will " invest in innovative and differentiated products."
Juli Jessen, Gowan chief executive, said that the company would " defend and evolve " the herbicide for use in vegetables and turf.
20 FARMERS GAZETTE November 2015