In late November, BASF purchased privately-held Becker Underwood for $1 billion, making the world's largest chemical company an instant leader in biological seed treatments as well as seed treatment colorants and polymers, an area where BASF already excelled.
It was another sign that multinational companies see a strong future for global agriculture and are doubling down on that commitment through mergers and acquisitions. More directly, the purchase signaled that BASF wants to be seen as a leader in sustainable agriculture with an emphasis on biologicals.
"We are entering the era of biologicals and harnessing their power in agriculture," said Peter Innes, Chairman and CEO of Becker Underwood. "We believe by 2020 the market will be worth $8 billion, so it's a big prize"
For farmer-customers it will be business as usual. No big changes are expected in brand names. Going forward, company officials on both sides of the deal say this will strengthen biological seed treatment product lines as farmers look for new ways to grow yields in a sustainable way.
Agriculture has been able to meet increased demand with crop protection products, fertilizers and plant breeding, added Innes, "but the world requires new yield-enhancing technology. We strongly believe the biologicals represent a good opportunity to increase yields."
Most of Becker Underwood will join BASF's newly formed Functional Crop Care division, part of the company's Crop Protection division. BASF will merge its existing research, development and marketing activities in the areas of seed treatment, biological crop protection, plant health, as well as water and resource management, with those of Becker Underwood. The goal is to successfully integrate the two companies by end of calendar year 2013.
"We will strengthen our sustainability strategy with a biological product portfolio," says Jürgen Huff, BASF senior vice president in charge of the new business unit. "This will put BASF in a different league regarding biologicals. We are joining forces to use synergies that benefit our customers."