AGCO buys Ag-Chem AGCO Corporation announced plans to purchase Ag-Chem Equipment Company, Minnetonka, MN, a manufacturer and distributor of ag machinery designed for fertilizer and chemical application. Ag-Chem also includes the site-specific technology division called Soilteq. Purchase of Ag-Chem will give AGCO a leading position in the self-propelled sprayer market. Ag-Chem is expected to post $299 million in sales for 2000.
Syngenta deal completed If you call Novartis or Zeneca these days, the receptionist will answer by saying "Syngenta." The companies recently completed the merger of their ag divisions into what now ranks as the world's largest agribusiness company, Syngenta.
Before completing the merger, Zeneca sold its acetochlor herbicide line to Dow AgroSciences. Some products now owned by Dow include Surpass, FulTime, TopNotch, Trophy and Wenner.
Deere profits up Earning reports from Deere & Company show a much stronger year for the Moline, IL, company than last year. The company reports that its net income for 2000 is double what it was for 1999. Worldwide net income was $485.5 million for the year ending in October compared with $239.2 million for same period in 1999. The ag equipment division added to this improvement by posting a 15% sales increase for the year.
Ethanol incentives Ethanol production received a big boost with word that USDA will give $300 million in incentives to increase biofuel production. The Commodity Credit Corporation will pay cash to bioenergy producers that increase purchases of ag commodities such as corn and convert them to ethanol or other biofuels. This means farmer-owned cooperatives and small energy plants will receive the bulk of the incentives.
CME turns for-profit The Chicago Mercantile Exchange recently reinvented itself by becoming the first U.S. financial exchange to transform from a not-for-profit, membership-owned organization to a for-profit, shareholder-owned corporation. The exchange is now referred to as the Chicago Mercantile Exchange Inc. Now the CME is issuing shares to its members. Eventually, anyone may buy shares.
The meatpacking business appears to be hot: Three offers came in for the purchase of IBP, the largest U.S. processor of beef and one of the largest processors of pork. At press time, IBP was considering all three offers. Two unsolicited offers came from Smithfield Foods and Tyson Foods, and a third came from IBP management and Wall Street investors.
Smithfield CEO Joseph Luter has said that his offer is the strongest. He proposes paying IBP shareholders $25/share in Smithfield Foods common stock. Smithfield itself is a major pork processor as well as the largest U.S. pork producer, to the tune of about 14 million hogs/yr.
The Tyson buyout plan will pay $26/share, split between stock and cash. Tyson is the largest poultry producer in the country. The IBP management plan offers $22.50/share.
Some farm groups have spoken out against Smithfield's and Tyson's IBP buyout plans, including the National Farmers Union. NFU is urging the U.S. Department of Justice to reject the buyouts because, the farm group says, it threatens an open, fair and competitive market. The group also is pushing for a congressional review of antitrust laws.
Aventis is spinning off its ag biotech division, which produces StarLink. The company recently announced it will divest itself from Aventis Cropscience through a possible stock sale. Aventis reports it will focus on just pharmaceuticals.
Aventis Cropscience was created just a year ago with the merger of Rhone Poulenc Agro and AgrEvo. The new company will be called Agreva. Major products going with the new company include StarLink and LibertyLink as well as crop protection products such as Liberty, Balance and Regent.
In early December, a class-action lawsuit was filed on behalf of farmers against Aventis, the developer of StarLink. The suit states Aventis failed to inform farmers that EPA had approved StarLink only for animal feed and industrial purposes. As a result, farmers allowed the StarLink crops to cross-pollinate with other crops in nearby fields and mixed the contaminated corn with regular corn supplies. Therefore, farmers who did not raise StarLink corn still had crops contamined with StarLink.