Dow Sells Brazilian Seed Assets to China’s CITIC

More details have emerged on Dow Chemical’s agreement to sell the Brazilian corn seed assets of its AgroSciences division to China’s CITIC Agri Fund for $1.1 billion. The divestment is required by Brazil’s antitrust authority as a condition for clearing the US group’s proposed merger with compatriot DuPont.

The deal includes seed processing plants and seed research centers, a copy of Dow AgroSciences' Brazilian corn germplasm bank, the Morgan seed brand and a license for the use of the Dow Sementes brand for a certain (undisclosed) period of time. The assets being sold generated revenues of about £287 million in 2016.

CITIC Agri Fund was established in June 2016 by CITIC Agriculture, a division of state-backed CITIC Ltd, together with Chinese seed firm Yuan Longping High-Tech Agriculture and two other listed agricultural companies.

China is rapidly expanding its presence in the global seeds industry, as illustrated by ChemChina’s recent $43 billion takeover of Swiss Syngenta. The Chinese group said last month that it is eager to pick up some of Bayer’s seeds assets, which the German firm will be forced to sell in order to gain international regulatory approval for its proposed $66 billion acquisition of Monsanto.

Dow reaffirmed that its merger with DuPont is expected to complete next month, with the intended spin-offs scheduled within 18 months of closure.