| What does the
merger of Hoechst AG and Rhône Poulenc S.A. mean for AgrEvo? |
December 14, 1998
As you have heard from the announcement from Hoechst
and Rhône Poulenc they will propose to their
respective shareholders to join forces and businesses in life sciences and form a new
global company under the name Aventis. With this operation the two companies will be
qualified to
better take advantage of the technology driven opportunities for an improved competitive
position in their principal businesses: Pharmaceuticals and Agriculture.
Under the terms of the agreement
both companies – Hoechst AG and Rhône Poulenc S.A. - will contribute all of the
assets of their respective Agro-businesses, namely AgrEvo and Rhône Poulenc-Agro in a new
entity, which will operate under the new name Aventis CropScience.
Shareholders Schering AG will retain a holding in the new company.
This merger will create one of the top global agricultural companies with a strong crop
protection and environmental health portfolio, a leading position in biotechnology and a
growing involvement in the seed industry. The fit of the combined portfolio will allow the
new Aventis CropScience
to become one of the leaders in the emerging crop production industry with total sales of
about 4.5 bn. US$ (pro forma sales in 1997) and about 15.500 employees worldwide at the
start of the new enterprise.
It is intended that Alain Godard will be CEO of Aventis CropScience which will be
headquartered in Lyon/France. Further members of the Directoire will be Dr. Gerhard Prante
, deputy to the CEO and responsible for strategy, seeds, crop improvement and non crop
business, Dr. Jürgen
Aßhauer as CTO, Jean-Pierre Lac as CFO and Jan Stranges, who will be responsible for crop
protection business.
Competitiveness of the new company will be strengthened through complementary weed-,
disease and insect management solutions as well as through the extended portfolio for
vector control and in the public hygiene market. Globally the new company will achieve a
market share in the crop protection market of 15% based on the 1997 proforma turnover.
A leading position will be achieved in Europe (market share 21%), Latin America (14%),
Asia-Pacific (11%), about 11% in North America and 15% in region International.
In the USA the Midwest presence will rapidly grow due to the combined portfolio of new
products for weed and insect management in maize, i.e. by selling the herbicides Liberty®
, Balance® , the insecticide Regent® and StarLink® , the Bt based insectresistance.
Aventis CropScience will be in the top-league in crop protection with a combined global
market share in herbicides of 13%, insecticides 15%, fungicides 15% and environmental
health 7%. Aventis CropScience will be a leader in the developing crop production market
in crops like canola (oil seed rape), corn, vegetables, rice and cotton.
With the financial funding of more than US$ 400 mio per year for Research and Development,
the new company will sustain growth in the traditional crop protection market through new
environmental friendly chemical entities as well as in the crop production market through
innovative crop productivity enhancing solutions based on chemicals, new traits and
superior varieties.
A credible and powerful approach in crop production is based on the new company‘s
leading position in biotechnology combined with direct market access through seeds in key
crops. The extended networks of both partners in functional genomics research for these
crops and a leadership position in agronomic traits and enabling technologies will further
support growth in that area. In the next step the new company will have the opportunities
to become a key player in quality traits in feed, food and fibres, e.g. in cotton.
Aventis CropScience intends to take full advantage of the integrating power of
biotechnology between traditional chemical crop protection and seeds and should be able to
achieve a better growth and profitability than the two companies as stand alone.
Full exploitation of the existing technologies combined with a higher efficiency of doing
business, should result in substantial business and cost synergies. All these will be
implemented at full respect of social principles and policies established in both partner
companies and according to
national social security laws in the respective countries.
The agreement between Hoechst and Rhône Poulenc is subject to regulatory approval by
agencies of the European Union and other countries. The new company – together with
its affiliates – is expected to come into effect mid 1999. Before closing of the
merger, both partners‘
businesses will be run separately. The focus of both partner companies in the coming weeks
and months will be on preparing the integration, including the development of a new
corporate culture and organisation.
We are sure that the combined agricultural businesses of AgrEvo and Rhône Poulenc Agro as
Aventis CropScience will be recognised as a leader in industry, a reference for its
customers, its employees and its shareholders.
We will keep you informed on the ongoing integration process in the next few months. If
you should have questions please do not hesitate to give me a call.
Dr. Wolfgang Faust
Corporate Communication
Tel. +49 (0)69 30515611
Fax +49 (0)69 305-80376
E-Mail: wolfgang.faust@agrevo.com N1510 |
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