Monterrey, Nuevo Leon
September 27, 1996Empresas La Moderna,
S.A. de C.V. (NYSE/ADR:ELM) (ELM) and DNA Plant Technology Corporation
(NASDAQ:DNAP) (DNAP) today announced the consummation of the merger of
ELMs fresh produce business with DNAP.
As a result of the transaction, which was approved yesterday by shareholders of DNAP
common stock, DNAP has become a wholly-owned subsidiary of DNAP Holding Corporation (DNAP
Holding). Each share of DNAP common stock has been converted into 0.1 shares of DNAP
Holding common stock, and each share of DNAP preferred stock has been converted into
0.68375 shares of DNAP Holding common stock. The former shareholders of DNAP own 30% of
the outstanding common stock of DNAP Holding and Bionova International, Inc., a subsidiary
of ELM, owns 70%. The shares of DNAP Holding common stock issued in the merger will be
listed on the NASDAQ National Market under the trading symbol DNAPD.
DNAP Holding is now a holding company for both DNAP and the fresh produce business of ELM.
DNAP is a leader in the genetic transformation of fruits and vegetables. ELMs fresh
produce business includes a controlling interest in several companies engaged in growing,
marketing, and distributing fresh produce in Mexico, the United States and Canada.
Alfonso Romo Garza, Chairman and Chief Executive Officer of ELM, said According to
our objectives, DNAP Holding will play a leading role in the development and
commercialization of high quality, differentiated fresh produce worldwide. Also, by
combining our fresh produce business with the scientific strength of DNAP, we have taken
another important step in achieving our stated objective of attaining global leadership in
the agro-biotech and seed industries,
complimenting and strengthening our recently announced technology alliance with
Monsanto.
In connection with the transaction, ELM has entered into a research agreement with DNAP
that will provide DNAP with $30 million in research funding over a 10-year period. It is
anticipated that a substantial portion of that research will be for the benefit of other
companies in ELMs agrobiotechnology division, including Asgrow Seed Company,
Petoseed, Royal Sluis and Agroindustrias Moderna.
ELM has also entered into a Governance Agreement with DNAP Holding for the next three
years, which provides for the Board of Directors of DNAP Holding to include at least four
independent directors whose majority vote will be required for approval of certain
material transactions.
Empresas La Moderna is a company based in Monterrey, Mexico. It has operations in three
divisions: Cigarettes, where it is a leader in the domestic market with a 53% market
share; the Agrobiotechnology division, a worldwide leader in vegetable seeds with a 22%
market share; and Packaging, where it is a leading domestic producer of folding boxboard
with a 50% market share. ELM reported total consolidated sales of US$922 million for the
first half of 1996 ended June 30, up 25% over the same period one year ago.
DNA Plant Technology Corporation, headquartered in Oakland, California, is a leading
agribusiness biotechnology company focused on developing and marketing premium branded
fresh and processed fruits and vegetables using advanced breeding, genetic engineering,
and other biotechniques. FreshWorld Farms, a wholly-owned subsidiary of DNAP, markets a
line of premium vegetables under the FreshWorld Farms brand, including tomatoes, carrot
bites (baby whole carrots), and sweet red mini-peppers. DNAPs two-track strategy
uses advanced breeding to develop and to market improved premium products for today, while
using genetic engineering to improve flavor and shelf life of its products for tomorrow.
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