BEIJING • A Chinese fund part- owned by state-backed conglomerate Citic has paid US$1.1 billion (S$1.52 billion) for some of Dow Chemical's corn seed business in Brazil, in a further sign of China's fast-expanding role in the global seed sector.
The deal includes seed processing plants and seed research centres, a copy of Dow AgroSciences' Brazilian corn germplasm bank, the Morgan seed brand and a licence for the use of the Dow Sementes brand for a certain period of time, Dow said on Tuesday.
The assets, which generated revenue of about US$287 million last year, are being sold by Dow to meet conditions set by US anti- trust regulators for its US$130 billion merger with DuPont.
The deal will boost China's share of the global seed business, which is being remade by a series of huge mergers. These include the US$43 billion takeover of Swiss firm Syngenta by state- owned ChemChina in China's largest foreign takeover.
ChemChina said recently it is looking to snap up seed assets that rival Bayer must sell to gain regulatory approval for its takeover of Monsanto.
Citic Agri Fund was founded last year by Citic Agriculture, a division of Citic, along with Chinese seed firm Yuan Longping High- Tech and two other listed agricultural firms, according to Citic's 2016 annual report.
Citic - China's largest conglomerate with interests in financial services, real estate and heavy industry - could not immediately be reached for comment. It made its first foray into the seed business in 2014, buying a majority stake in Yuan Longping, one of China's leading breeders of hybrid rice.
Dow and DuPont announced their all-stock merger in December 2015. The two companies won US antitrust approval last month to merge on condition that they sell certain crop protection products and other assets. The European Union also cleared their merger in March.
Dow reaffirmed that the merger deal was expected to close next month, with the intended spin- offs to occur within 18 months of closing.
The firms have said they would split into three separate companies specialising in material sciences, speciality products, and seeds and agrochemicals upon completion of the merger.