Mycogen deal will further Dow's market push
Date: Tue, 6 Oct 1998 14:47:06 -0700
From: ilena rose ilena@san.rr.com
Midland Daily News -- Tuesday
By LISA F. SMITH of the Daily News The Dow Chemical Co. Is one step further in its plans to gain a greater presence in the biotechnology market. The company announced Monday that its offer to buy the remaining shares of Mycogen Corp., a seed developer, was accepted. The announcement comes about a month after Dow said it was going to take a more aggressive approach in the biotechnology realm. Biotechnology can include developing plants that resist herbicides and insects, provide richer animal feed or improve the nutritional content of food. Dow also i working to produce plant-based chemicals and plastic for industrial use.
Mycogen has a significant range of gene technology and the ability to put genes in plants, said Doug Draper, Dow spokesman. "We are using biotechnology as a key platform to accelerate Dow's growth," he said. "Mycogen is a great company because it provides two of the things we need." Those things include the know-how of researchers in the biotechnology field and the materials needed to make products.
For example, Mycogen has technology for germplasm, the foundation material used to carry a gene into a seed. Mycogen also has marketing alliances with seed producers and growers, Draper said. Through its AgroSciences Acquisitions Inc., Dow bought about 14.7 million shares of Mycogen common stock. Mycogen will be a wholly owned subsidiary of Dow when the purchase is complete. Dow AgroSciences had 24.8 million shares of Mycogen already. AgroSciences Acquisitions and Dow AgroSciences are both wholly owned subsidiary's of Dow Chemical.
But in a 1996 agreement, Dow had pledged not to raise its stake in Mycogen beyond 68 percent until February. In August, Mycogen agreed to allow Dow to make an offer for the remaining shares.
Dow now owns about 99.3 percent of Mycogen's outstanding shares. The remaining shares will be bought this month, Draper said. Mycogen has annual sales of about $211 million and Dow AgroSciences has annual sales of about $2 billion.