January 15, 1996
INDIANAPOLIS -- DowElanco, Mycogen Corporation (Nasdaq: MYCO) and The Lubrizol Corporation (NYSE: LZ) today signed definitive agreements for transactions through which Mycogen will acquire DowElanco�s United AgriSeeds seed business and DowElanco will take approximately a 46 percent equity stake in Mycogen.
San Diego-based Mycogen agreed to issue about 4.5 million shares of common stock to Indianapolis-based DowElanco in exchange for United AgriSeeds and $26.4 million in cash. In a separate transaction, DowElanco agreed to purchase all of the 9.5 million shares of Mycogen common stock owned by Cleveland-based Lubrizol, Mycogen�s largest stockholder, for $126 million. These include 3.4 million newly issued shares resulting from Lubrizol�s conversion of its 19.5 percent ownership interest in Mycogen�s seed business and $31.6 million of Mycogen preferred stock. Mycogen also agreed to reacquire certain rights in oil seed technology from SVO Specialty Products, Lubrizol�s specialty oils subsidiary, for $8 million. At the completion of those transactions, DowElanco will hold approximately 14 million of the 30.4 million outstanding shares of Mycogen common stock. The agreement allows DowElanco to acquire additional Mycogen common shares. The transactions are subject to government approvals.
�This alliance is a cornerstone for Mycogen,� said Jerry Caulder, Mycogen�s chairman and chief executive officer. �We�re joining forces with a strong partner with extensive agribusiness resources and experience that wants to work with us strategically to build a major agricultural biotechnology company.�
John Hagaman, DowElanco�s president and chief executive officer, said, �This alliance is a major step forward in biotechnology for DowElanco. It positions both DowElanco and Mycogen to meet the challenges facing production agriculture as it responds to the future needs of our larger, global society.
�We believe that biotechnology will play a very major role in the development of future products for agriculture and offer multiple areas of substantial opportunity,� Hagaman said.
W.G. Bares, president and chief executive officer of Lubrizol, said that the transaction will allow Lubrizol to monetize its entire investment in Mycogen, which he called �non-strategic� to Lubrizol�s main business.
�We have been seeking a purchaser that could bring strategic value to Mycogen,� Bares said. �DowElanco is an excellent fit.�
Caulder said United AgriSeeds and Mycogen Seeds will create an entity that had 1995 sales of more than $100 million. Mycogen consolidated sales of 10 regional brands and sold all of its seed products under the Mycogen� brand for the first time in 1995. United AgriSeeds markets its products under the Lynks� and Keltgen� brands.
�The combination of Mycogen Seeds and United AgriSeeds strengthens Mycogen�s platform for introducing proprietary, genetically enhanced seed products,� said Carl Eibl, Mycogen�s president and chief operating officer. �This transaction also strengthens Mycogen�s balance sheet for future growth of both our seeds and biopesticide business units.�
Mycogen is a diversified agricultural biotechnology company that develops and markets technology-based products and provides crop protection services to control agricultural pests and improve food and fiber production. Mycogen Seeds is a leader in developing crop plants with genetically enhanced pest-resistance. In August 1995, it received Environmental Protection Agency approval to begin marketing the first hybrid seed corn genetically engineered with Bacillus thuringiensis (Bt) genes that produce a protein that gives corn plants built-in resistance to European corn borer, a major pest in corn production.
DowElanco, with global sales of $2 billion, is a research-based agricultural and specialty pest management company with significant research initiatives aimed at insect, weed and plant disease management. The company�s own biotechnology program will enhance Mycogen�s. DowElanco�s research has led to the development of corn with enhanced oil and protein production as well as the ability to resist insect attack. DowElanco�s research has also produced Naturalyte*, a new class of insect management products. Products in the Naturalyte class are based on natural metabolites derived from living organisms in a fermentation process. The first Naturalyte product registration is anticipated in the U.S. in 1996. The company discovered and registered the active molecule for the Sentricon* Colony Elimination System, which uses a unique, low-dose insect growth regulator and novel baiting technology to control destructive subterranean termites.
Greg D. Taylor
The Lubrizol Corporation
(216) 943-4200
Michael Sund
Mycogen Corporation
(619) 453-8030
Home | Corporate Info. | Seeds | Crop Protection |Other Links
Copyright © Mycogen Corporation 1996