Mycogen Corporation has signed definitive agreements to expand its presence in the large and
strategically important Brazilian seed market by acquiring two companies that develop and market seed products for corn and sorghum. The transactions, which are expected to close
within 30 to 60 days, 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 Hibridos Colorado Ltda. and FT Biogenetica de Milho Ltda., together with the April 1998 purchase of Dinamilho Carol Productos Agricolas Ltda., position Mycogen to be a significant player in the rapidly growing "high tech" segment of the Brazilian seed corn market.

Brazil is the world’s third largest corn producer, behind the United States and China, but high yielding hybrids are planted on only 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.

"With millions of additional acres coming into production and increasing adoption of higher yielding hybrid corn products, Brazil is positioned to play a major role in meeting growing
global demand for grain," Eibl said. "The combined assets of these three companies will give Mycogen an excellent platform to develop new products, establish national distribution and introduce the value-added crop enhancement traits we are developing."

In 1996, Mycogen introduced the first U.S. seed corn products carrying an insect-resistance gene from Bacillus thuringiensis (Bt), a soil bacterium. Bt genes enable plants to produce a natural insecticide that protects them from insect damage. Mycogen 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, and already has initiated a breeding program to introduce Bt traits into Brazilian corn lines.

Mycogen’s Brazilian seed acquisitions are the latest in a series of transactions over the past five years to establish global corn, cotton and oilseed businesses through which to commercialize technology-based crop enhancement traits. Between 1993 and 1996, the company consolidated several 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. Mycogen entered the cotton seed business earlier this year with the formation of Phytogen Seed Company LLC, a joint venture with J.G. Boswell Company, the world’s largest cotton fiber producer. In April, Phytogen expanded into South America with the acquisition of a cotton breeding program in Argentina.

Eibl said that, in addition to creating a commercial base in a rapidly growing market, the Brazilian acquisitions bring a wide array of tropical, subtropical and temperate "germplasm" that significantly diversifies the pool of corn breeding material that Mycogen has been assembling to
develop seed products for key growing regions throughout the Americas and elsewhere.

"Our strategy is to create value by improving production efficiency with transgenic traits for insect and disease resistance and herbicide tolerance, and by enhancing and increasing crop outputs such as oil and protein," Eibl said. "With a broader base of breeding material, we can develop higher-yielding genetic packages that will be further enhanced as additional technology-based traits become available."

N1216  is next