Syngenta is on a shopping spree
24.09.2012 - Syngenta is set to buy two biotech companies: The Swiss firm is willing to pay up about €500m for seed maker Devgen NV and Pasteuria Biosciences.
Syngenta announced an offer to acquire all outstanding shares of Devgen NV at a price of €16 in cash per share, valuing the Belgian hybrid rice seed producer at €403m in total. The offer price represents a premium of 70% to Devgen's closing price on NYSE Euronext Brussels on 20 September 2012, the day before the tender offer was made public.
The Belgian group posted sales of €25.5m and an operational loss of €6.3m in 2011. Created in 1997, the company employs 250 people and among its products is a hybrid rice developed for India and South-east Asia. The asset will have a “very significant impact” on Syngenta’s $500 million rice business, Chief Operating Officer Davor Pisk said in an interview today. "We are also buying their competence in RNAi technology which are relevant for us across a broad range of crops“, added Syngenta spokeswoman Jennifer Gough.
This is Syngenta's second deal announced within a week. Only days before, Swiss company revealed its plans to acquire Pasteuria Biosciences for €87m. Since 2011, Syngenta and the US company have had an exclusive global technology partnership to develop and commercialise biological products to control plant-parasitic nematodes, using the naturally occurring soil bacteria Pasteuria spp.
With its acquisition strategy, Syngenta reacts to the increasingly fierce competition with agribusiness companies Bayer and BASF both of Germany. BASF recently announced the intention to buy Becker Underwood for €785m, while Bayer decided months ago to purchase US-based AgraQuest for €340m plus milestone payments.