Mycogen Corp. said Tuesday that it has completed theacquisition of Lubrizol Corp.'s agricultural seed and plantscience division, Agrigenetics Co., in a $135 million dealannounced in April.
The transaction involved the formation of a partnershipbetween Mycogen and Lubrizol giving Mycogen a 51 percentinterest and Lubrizol a 49 percent interest. To acquirecontrolling interest in the partnership, Mycogen of San Diegotransferred 2.29 million shares of its common stock(NASDAQ:MYCO) and $39.4 million of a new series of Mycogenredeemable, preferred stock to Lubrizol (NYSE:LZ) of Wickliffe,Ohio.
Mycogen said that as a result of the transactions, Lubrizol ownsapproximately 25 percent of Mycogen's outstanding stock andcould increase its ownership to 33 percent by converting thepreferred stock. However, Lubrizol has agreed not to do sowithout the approval of Mycogen's board.
The partnership will operate as a plant science division ofMycogen, and Agrigenetic's President John Studebaker and hissenior management team will relocate to San Diego fromEastlake, Ohio.
Under the agreement, Lubrizol will provide $12 million inresearch funding to Agrigenetics over the next five years forthe development of specialty plants with unique oilcharacteristics. Agrigenetics will produce planting seeds forthose crops and sell them exclusively to Lubrizol.
Mycogen stock dropped 50 cents a share on Tuesday to $12.25.
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