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Mycogen to acquire Brazilian seed corn company

SAN DIEGO, California
April 20, 1998

Mycogen Corporation has signed definitive agreements to acquire Dinamilho Carol Productos Agricolas Ltda., a leading Brazilian developer and marketer of high-yielding hybrid seed corn products. The transaction, which is expected to close within two weeks, will be financed through a line of credit provided by Dow AgroSciences, Mycogen’s majority owner. Financial terms were not disclosed.

Mycogen’s president, Carl Eibl, said that the acquisition of Dinamilho, which had sales of approximately $12 million in its fiscal year ended December 31, 1997, establishes a position for Mycogen in Brazil, the world’s third largest corn producer, behind the United States and China.

"Brazil will play a major role in meeting rapidly increasing global demand for grain, both through increased acreage and through adoption of higher-yielding hybrid seed corn," Eibl said. "Dinamilho’s breeding program and products target the highest value hybrid seed market segment, where we expect strong demand for the value-added crop enhancement traits that Mycogen is developing."

In 1996, Mycogen introduced the first U.S. seed corn products carrying a gene from Bacillus thuringiensis (Bt), a soil bacterium, that enables corn plants to produce a protein that protects them from feeding damage caused by European corn borer, a major pest in U.S. corn production. Mycogen currently is collaborating with Pioneer Hi-Bred International, the world’s largest seed company, to develop Bt-based insect-resistance traits for corn and several other crops.

The purchase of Dinamilho is the latest in a series of acquisitions Mycogen has made over the past five years to establish global corn and oilseed businesses through which to commercialize technology-based crop enhancement traits. Between 1993 and 1996, the company consolidated more than 10 U.S. seed brands into Mycogen Seeds, which now ranks fourth in North American seed corn sales. In 1996, Mycogen acquired Morgan Seeds, Argentina’s third leading seed corn marketer, and acquired an equity stake in Verneuil Holding to establish a foothold in Europe’s corn and oilseeds markets.

Eibl said that, in addition to adding a commercial base in a rapidly growing market, the Dinamilho acquisition brings valuable tropical "germplasm" to diversify the pool of corn breeding material that
Mycogen has been assembling to develop seed products for key growing regions.

"To use a software analogy, germplasm is the ‘operating system’ through which specialized ‘programs’ or biotechnology traits, such as insect and disease resistance, herbicide tolerance and improved oil characteristics, are delivered to the marketplace," Eibl said. "Mycogen needs a diverse, proprietary, germplasm base and a retail seed distribution network to ensure access to global markets for our value-added traits. We are pleased to have been able to acquire this excellent seed property in a high-growth market."

In 1997, Dinamilho had a 10 percent share of Brazil’s highest-value hybrid seed corn segment, which is expected to grow rapidly as grain producers adopt higher yielding hybrid seeds. Hybrid seeds are planted on about half of Brazil’s corn acres, as compared to more than 90 percent of U.S. corn acreage. As a result, Brazilian corn production averages about 40 bushels per acre, compared to the U.S. average of nearly 130 bushels per acre

"Value creation in the seeds industry comes from significant productivity improvements," Eibl said. "Together, Mycogen and Dinamilho can deliver an inherently higher-yielding genetic package that will be further enhanced as insect-resistance and other technology-based traits become available."

For more information about Mycogen, please call 1-888-SEE-MYCO (1-888-733-6926) or visit Mycogen’s website at http:// www.mycogen.com

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