BASF pays $3.8billion for agrochem position
3 May 2000
With its proposed $3.8billion acquisition of Cyanamid, BASF is to double the size of its agrochemicals business, putting it into the top four players in the global crop protection market.
Cyanamid is being bought from American Home Products in a move that echoes last year's consolidation in the market. This saw Hoechst and Rhone Poulenc combining to form Aventis, and AstraZeneca and Novartis merging their agrochem businesses to form Syngenta.
A quartet of companies - Aventis, Syngenta, Monsanto and now BASF/Cyanamid - between them now account for some 60 per cent of the global agrochem market.
BASF is believed to have outbid Bayer, DuPont and Dow Chemical for the crop protection business, which leaves AHP as primarily a pharmaceuticals company.
According to BASF's head of health and nutrition, Eggert Voscherau, a key factor in the purchase was Cyanamid's strong marketing presence in the US. In 1999 Cyanamid had sales of $1.7billion, while BASF's agrochems generated sales of $1.9billion. The new company has plans to introduce up to 15 new products over the next five years, when it is expected that the sales split will be around 53 per cent from herbicides, 22 per cent from fungicides and the remainder from insecticides.
At current combined sales of $3.6billion, the BASF/Cyanamid grouping will be fourth in the market, currently led by Aventis with sales of just under $4billion.
Pending approval by the regulatory bodies, the merger should be completed by 1 July.
* In the run-up to its proposed merger with Pharmacia & UpJohn, Monsanto is disposing of its interests in artificial sweeteners.
The NutraSweet and Neotame brands are being sold for $440million to JW Childs Equity Partners, while Monsanto's $67million share in two European joint ventures is to go to the Japanese company Ajinomoto, the long-term partner in the Swiss and French joint ventures.
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