Syngenta offers to acquire hybrid seed firm Devgen

Swiss agrochemicals company Syngenta has announced an offer to acquire Belgian hybrid seed firm Devgen for €403m, as part of its plan to strengthen its presence in the rice market.

The takeover bid is for all the outstanding shares of Devgen, at €16 for each share, which represents a premium of 70% to Devgen’s closing price of €9.43 on 20 September 2012.

Syngenta also plans to acquire all the outstanding warrants issued by Devgen.

The Belgian firm, which markets its products primarily in Europe, the US, India and South-East Asia, offers hybrid rice varieties that have been engineered to resist disease.

The company offers crop protection solutions – it produces novel nematicide, an agrochemical product that protects various crops such as potato, carrots, cucumber, melons, bananas, tomatoes, peppers, eggplants and peanuts.

Devgen also specialises in insect control based on RNAi – a naturally occurring mechanism used for the regulation of specific genes.

Syngenta noted that the acquisition will enable the company to combine its leading crop protection portfolio with Devgen’s rice hybrids and broad germplasm diversity.

Syngenta COO Davor Pisk said the deal will significantly strengthen the company’s global position in rice, allowing it to expand its portfolio by offering the next generation of hybrid rice.

"Rice is critical to global food security and we expect to make a key contribution to improving productivity," Pisk added.

Syngenta noted that the deal has been approved by the board of directors of Devgen and is already supported by several major shareholders who hold approximately 48% of all shares.

The company plans to delist Devgen from the NYSE Euronext Brussels exchange upon the completion of the transaction.

This deveopment comes after the two companies signed a crop protection agreement in May 2012, under which Syngenta invested €22m in Devgen’s RNAi crop protection business, which develops sprays that destroy worms that attack carrots and potatoes.

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Image: Syngenta aims to offer the next generation of hybrid rice with the proposed acquisition of Devgen. Photo courtesy of Syngenta.