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AGRICULTURE
U.S. Farmers Are Planting More Biotech Crops

Related Stories
BAYER INTENDS TO STAY THE COURSE
[C&EN, Mar. 26, 2001]

Aventis CropScience: Whole Or In Parts
[C&EN, Mar. 26, 2001]

Bayer Keeps Pace In Agrochemicals
C&EN, Oct. 23, 2000]

Starlink Corn Derails Ag Chain
[C&EN, Jan. 22, 2001]

Farmers Sue Aventis Over StarLinl Corn
[C&EN, Dec. 11, 2000]

ACCEPTING AGBIOTECH
[C&EN, Oct. 2, 2000]

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Bayer

Schering AG

BASF

Aventis

Aventis CropScience

FDA

EPA

USDA

Centers for Disease Control & Prevention

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NEWS OF THE WEEK
BUSINESS
July 16,
 2001
Volume 79, Number 29
CENEAR 79 29 p.6
ISSN 0009-2347
[Previous Story] [Next Story]

BAYER IN LEAD FOR AVENTIS AG UNIT
Bayer, Aventis, and Schering talks turn exclusive as likely deal nears

ANN THAYER

Aventis and Schering AG have entered exclusive discussions with Bayer about selling their $3.7 billion-per-year Aventis CropScience joint venture. "After analyzing first bids from several companies, Bayer has emerged as the most promising partner, financially and socially," Aventis says.

7929NOTW.schneider
SCHNEIDER
COURTESY OF BAYER
If it comes off, the acquisition, at a price estimated between $5 billion and $7 billion, would be Bayer's largest ever. "Our crop protection business is a core activity," Bayer Chairman Manfred Schneider says. "By merging the two businesses, we would create one of the world's leading companies in this industry, headquartered in Europe with global reach."

Bayer--with its mix of chemicals, plastics, and drugs--would emerge as the number two agrochemical player after Syngenta. Novartis and AstraZeneca created Syngenta, with about $6 billion in annual agrochemical sales, by combining their agribusiness operations so that they could focus on pharmaceuticals.

If the long-expected CropScience divestiture goes through, it would mark the disintegration of the last life sciences company focusing on drugs and agriculture. Aventis, which was formed in December 1999 from the merger of Hoechst and Rhône-Poulenc, said last fall that it wants to concentrate solely on pharmaceuticals.

However, only recently did Aventis and minority stakeholder Schering agree that selling CropScience, rather than spinning it off, is "the most value-enhancing option." Aventis owns 76%, and Schering, the remainder. A problem for Aventis has been finding a buyer that could afford the whole operation and avoid antitrust issues.

Observers suggest that, following an acquisition, Bayer might sell Aventis' insecticide business, which had about $960 million in 2000 sales, to BASF to satisfy antitrust authorities. Bayer's annual agribusiness sales would then be about $5 billion, based on 2000 figures.

However, Bayer also would be inheriting Aventis' controversial genetically engineered StarLink corn. The corn was found late last year in yellow-corn-based foods, leading to major product recalls and grain-handling problems. Recently, FDA and the Centers for Disease Control & Prevention determined that StarLink does not cause allergic reactions; EPA is to decide this week if the corn is fit for human consumption.

Aventis has already taken a charge of nearly $100 million to cover StarLink buybacks and reimbursements to farmers, grain handlers, and food processors. The controversy recently resurfaced when StarLink was found in white-corn products. It's expected that any buyer would seek indemnification or additional monies to cover potential costs.

At this time, the companies are emphasizing that the sale talks do "not constitute any legally binding agreement." If they reach a definitive agreement, it will be subject to regulatory approvals and is not expected to be completed until sometime in 2002.

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7929NOTW1.cotton2
CAROLYN MERCHANT/UC BERKELEY
7929NOTW1.corn
USDA
7929NOTWsoybean2
TIM MCCABE/USDA
AGRICULTURE

U.S. Farmers Are Planting More Biotech Crops

ANN THAYER

USDA's June agricultural survey found that the planting of genetically engineered crops in the U.S. was up in 2001. The finding might seem surprising considering the row that erupted over Aventis' StarLink corn, which appeared unapproved in the food supply in late 2000 and disrupted farm, grain-handling, and food-processing activities (C&EN, Jan. 22, page 23). Some observers predicted that the flap would cause farmers to shy away from genetically engineered crops, while others suggested that the benefits of using them outweigh the risks. The latter appear to be right.

USDA reports that U.S. farmers planted genetically engineered corn on 26% of all corn acres, just 1% more than in 2000. Insect-resistant and herbicide-tolerant cotton varieties accounted for a combined 69% of cotton acreage, up from 61% last year. Farmers planted herbicide-tolerant soybeans on 68% of U.S. soybean acreage, compared with 54% in 2000. In all, U.S. farmers planted at least 72 million acres with genetically engineered crops.

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