Crop Protection: Consolidation hit off-patent agricultural chemical sector
Agricultural chemical makers went on a buying spree this year, targeting off-patent crop chemical businesses.
Among the biggest consolidators was recently formed chemical firm Platform Specialty Products, which cut a deal in April to buy Chemtura’s AgroSolutions business for $1 billion. Then in August, Platform snapped up Belgian off-patent pesticide and seed treatment maker Agriphar for $384 million.
But Platform’s biggest deal of all was the October acquisition of agchem formulator Arysta LifeScience for $3.5 billion. When the deal closes, it will put Platform among the top 10 players in the agrochemicals business, with nearly $2.2 billion in annual sales.
FMC became a consolidator too when it reached a deal in September to buy Danish crop chemical maker Cheminova for $1.8 billion. In fact, FMC found the opportunity to combine its agchem operations with Cheminova’s so compelling that it decided to sell its soda ash business and use the proceeds to pay for Cheminova. FMC had been planning to spin off its soda ash and lithium operations to shareholders.
In October, Adama, the Israeli off-patent agrochemical powerhouse formerly known as Makhteshim Agan, agreed to pay $623 million for the agchem operations of its majority owner, ChemChina. The deal will create a $4 billion-a-year crop protection business. Adama had intended to raise cash for further growth with an initial public offering on the New York Stock Exchange, but the company postponed it last month, citing adverse market conditions.
Two big fertilizer makers also tried to get into the consolidation act but couldn’t quite get there. In September, Norway’s Yara International and U.S.-based CF Industries revealed they were discussing a merger that would create a $20 billion-per-year plant-nutrient powerhouse. But the next month, the firms said they could not agree on terms, and so the deal was off.
Another fertilizer maker, Agrium, succeeded in snapping up two small plant-nutrient technology firms: CH Biotech R&D, which specializes in technologies that foster nutrient utilization, and Agricen, which develops biochemicals that enhance plant nutrition.