The long-rumored sale of Advanta BV, the seed business owned by AstraZeneca, and Royal Cosun of the Netherlands, was announced Wednesday morning. The North American corn and soybean business of Advanta - The Garst Seed Company - will go to Syngenta. The non-U.S. business and the U.S. non-corn and non-soybean business will go to Fox Paine - an investment group. And Fox Paine will own a minority interest in the North American business.
Syngenta says the Garst purchase will boost its market share for corn seed to 11% and for soybeans to 10% for season 2005. Interestingly, at one time Garst almost became part of Syngenta when that firm was formed out of the merger of the ag divisions of Novartis and Zeneca several years ago.
However, the ownership structure of Advanta - with two parents - and current market conditions kept the seed business out of the Syngenta merger. Today Michael Pragnall, Syngenta chief executive officer, comments that this move is a natural: "We are happy to welcome the Garst business back into the Syngenta family."
At the same time, Syngenta also announced it would buy glyphosate tolerance technology from Bayer CropScience. Called GA21, the technology can be used to confer glyphosate tolerance to corn and will provide Syngenta the ability to market a complete range of biotech input traits for next season.
Pragnall comments that Syngenta had announced it would be ramping up its position in the marketplace and this acquisition speeds that effort by about two years. The new agreement with Bayer gives Syngenta access to that GA21 glyphosate resistance event. That's the trait that Monsanto and Bayer fought over in court - a case that started back when Rhone Poulenc was the original owner of the GA21 trait. The courts have ruled that Bayer owns the trait.
As for the Garst and NK brands? You'll still be seeing them in the countryside. "The lessons of business teach us to maintain the strengths of the market position of any enterprise. Garst has its particular distribution strengths and NK has its own," Pragnall says. "We will not destroy value by derailing the well-traveled distribution path."