A number of massive agricultural acquisitions were seen over the past two years. Bayer bought Monsanto for $63 billion in a transaction completed in June this year. This was a two year long process and had to be approved by the anti-monopoly authorities of 30 countries. The value of this transaction is more than two times the gross domestic product of Zambia and their total workforce all over the world is 115 000! Five banks, namely BofA Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan, took part in financing this deal.
At the end of August last year the equal merger between Dow AgroScience and DuPont was completed under the name Dow-DuPont. The transaction was worth a mind-blowing $130 billion. Today Dow-DuPont is number 47 on the 2018 Fortune 500 list of corporations in the United States. In June 2019, the company will split into three, namely Corteva Agriscience, Dow and DuPont.
They will take ownership of the agriculture, material science and speciality products divisions respectively. In July last year, ChemChina took over ownership of Syngenta for $43 billion. ChemChinia is a Chinese state-owned chemical giant and ranked 211th on the Fortune Global 500 companies. China is very eager to boost their local agriculture and this was the largest ever foreign purchase by a Chinese firm.
These massive transactions might pose an uneasy feelings for farmers. Concerns about products taking longer to reach the farm due to new organisational complexities or monopolised prices, are valid. But it is reassuring to see that the anti-trust laws of all the countries involved kicked in before
these transactions were completed. Since governments are very concerned about food security, I believe that they made the right decisions.
Combined brain power in the R&D departments of these huge corporations might actually benefit the Zambian farmer in terms of effective lower inputs and innovations. It will be very interesting to see what they will come up within the following years.
This month we take a walk in a pair of Neptun boots and Zimmatic tells us about a 40-year old pivot still in operation. Novatek and Tiger Feeds once again give excellent advice on animal nutrition.
Du Preez de Villiers – firstname.lastname@example.org
Read our ProAgri Zambia 035 here: ProAgri Zambia Issue 035