German chemicals and pharmaceutical company Bayer has said it will undertake its largest ever acquisition with the €7.25bn (US$6.64bn) purchase of Aventis CropScience, a unit currently owned 76% by French biotech giant Aventis and 24% by Schering.
The companies have been in negotiation since July, and the purchase price includes the assumption of debt accruing to Aventis CropScience. The liabilities for the controversial GE corn StarLink will remain with Aventis however.
Bayer expects to finance the deal through new borrowing, and the company’s chairman Manfred Schneider commented yesterday (Tuesday) that the purchase vindicated investment for the long term in growth areas.
Jochen Wulff, currently general manager of Bayer’s crop protection business, will head up the independent crop science unit to be created by Bayer. The CEO of Aventis CropScience will stay on however during the integration period.
The deal, which is expected to be closed by the first quarter of next year, will see the German group bring in combined sales of between €6.5bn and €7bn for 2001, making it the second largest agrochemical producer in the world after Switzerland’s Syngenta. Officials expect to see annual synergies of €500m through the acquisition after a one off restructuring charge of around €500m.