Citic Agri Fund has completed its $1.1 billion acquisition of some of Dow Chemical Co.’s Brazil agriculture assets, a move that has netted the company a significant chunk of the country’s huge agricultural sector…Full Article: Caixin Dec 2017

Key Point

  • As a result of the acquisition, Citic Agri Fund now owns four Dow AgroSciences’ corn seed production sites in Brazil, four research centers, and a copy of Dow’s Brazilian corn seed bank. The new Brazilian assets, called LP Sementes, will be managed by Long Ping High-Tech Agriculture and will have an 18.5% share of Brazil’s corn seed market.

ChinaAg Comments

  • In July 2017, CITIC Agri Fund paid USD 1.1 billion for a collection Dow Chemical corn seed businesses in Brazil.
  • In May 2017, China approved the Dow DuPont merger. According to the Ministry of Commerce, the merged company (DowDuPont) would control 40% of China’s weed killer (pesticide) market, as well as 100% of its ionomers (i.e. sealants, dental cement) and 75% of its acid copolymers [food packaging adhesives] markets.
  • In 2016, CITIC Agriculture, together with Yuan Longping High-Tech Co and two other listed agricultural companies, established the CITIC Agri Fund.
  • In December 2015, Dow Chemical (founded 1897, HQ in Michigan) announced it would merge with DuPont (founded in 1802, HQ in Delaware). The new company, DowDuPoint, would have an estimated value of USD 130 billion. During the same month, Dow Chemicals announced they would sell/divest its global herbicide business.
  • In 2015, CITIC Limited became a controlling shareholder in Yuan Longping High-Tech Agriculture (SHE:000998).
  • Established in 1999 and headquartered in Changsha, Hunan province, Long Ping High-Tech Agriculture (SHE:000998) produces and distributes specialized crop seeds. These include hybrid rice seeds, hybrid pepper, hybrid rape, hybrid corn, hybrid cotton, musk melon and vegetables. The company manages various subsidiaries including Hunan Longping High-tech Nongping Seeds, Hunan Xiangyan Seeds, Hunan Longping High-tech Cotton & Rape Seeds, Agrochemical Development Company, Hunan Nongwei Science and Technology, Hunan Kangyida Science and Technology, and Hunan Longke Agricultural Materials.
  • Founded in 1979 and headquartered Beijing, CITIC Group (formerly CITIC Pacific; HKG:0267) is a state-owned conglomerate. Dah Chong Hong Holdings (Hong Kong listed) and Citic Guoan Wine (Shanghai listed) are subsidiaries of CITIC.

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