By Jim Shrine

Special To BioWorld Today

A spokeswoman for Cargill Inc. said "radical changes, driven largely by biotechnology" fueled the decision by Hoechst Schering AgrEvo GmbH to buy the company's North American seed assets for $650 million.

The move came almost three months after privately held Cargill, of Minneapolis, sold its international seed operations to Monsanto Co., of St. Louis, for $1.4 billion.

"We're seeing a whole host of new players in the seed industry," said the spokeswoman, Lori Johnson. "You need three things to succeed now in this business: excellent germplasm, broad-based distribution and access to biotechnology development. We had two of the three, [but were] lacking the biotechnology development element. That's what both Monsanto and AgrEvo bring to our two seed businesses."

Cargill Hybrid Seeds North America, the product line sold to AgrEvo, had sales of $106 million in the fiscal year that ended May 31. The diversified company's total sales for that year were $51 billion.

Mike O'Brien, spokesman for AgrEvo USA's corn and soybean business in Apple Valley, Minn., said AgrEvo had worked with all the major seed companies but not the end users. This deal, he said, "provides us direct access to the marketplace. It also provides us with the opportunity to go straight to the farmer with this technology.

"The bigger statement," he added, "is that we definitely are committed to being a player in Midwest agriculture."

Access to Cargill's germplasm, the fundamental seed product, gives AgrEvo the ability to expand its biotechnology products, most of which now involve input traits. They include LibertyLink, an herbicide-resistant trait; StarLink, which protects against the European corn borer; and SeedLink, a developing product to aid in corn seed production. Coming is TwinLink, with a combination of two Bt proteins.

AgrEvo, a Frankfurt, Germany-based joint venture between German companies Hoechst AG and Schering AG, has been involved mostly in producing chemicals to protect crops. "We're moving from a protection company into a crop production company," O'Brien said. "It's basically a marriage of input traits and output traits in germplasm."

The acquisition includes 500 employees and production facilities in 14 U.S. states and one Canadian province. Cargill will keep ownership of its canola, wheat and seed distribution businesses. The deal is expected to close Nov. 2.

Cargill entered the biotechnology arena in May when it established a joint venture with Monsanto to develop and market new feed additives grown from bioengineered crops. That venture continues, even with Monsanto's buyout of the international seeds business.

AgrEvo, which operates in more than 75 countries and has 8,500 employees, added to its biotechnology research efforts through an early July collaboration with Gene Logic Inc., of Gaithersburg, Md. Gene Logic will receive at least $45 million to identify genes for the development of crop protection and improved products.

Johnson said the company has seen "a rapid acceptance at the farm level of the first generation of biotechnology traits [such as insect resistance]. It's a whole new piece of the business that companies need to succeed and prosper. We're moving from the first generation of biotech traits to the next generation: agronomic traits" — the end-use quality traits such as increased yields, reduced costs and better products.

Cargill had a 4 percent market share of the U.S. corn seed market last year and was the market leader in sunflower seeds. The deal with AgrEvo also includes soybeans, sorghum and alfalfa. Cargill, which has been in the seeds business since the 1920s, licensed its trademark under the deal and will continue marketing its brand of seeds to farm customers for at least three years, Johnson said. *