International seed specialist KWS sells its corn business activities in Brazil and Argentina to the Argentinian plant genetics company GDM. Both companies signed a binding agreement today. With this step, KWS follows its strategic targets related to crop diversity and independence.
The transaction includes all breeding and sales activities for corn in South America (Brazil, Argentina, Paraguay, Uruguay) as well as all corn production locations in Argentina and Brazil.
“Long-term, profitable growth and independent decision-making are the prerequisites for our entrepreneurial success. Based on this, we have set a clear strategic focus supporting the future needs of farming and our sustainability ambition. This includes the enablement of an ongoing diversification of our crop portfolio, the development of a strong footprint in the global vegetable market and the supply for an increasing demand of plant-based food”, explains Nicolás Wielandt, Executive Board member responsible for the corn business.
“In South America, we established a strong position in the corn market, something we are very proud of. With a market share of 10% in Brazil as the largest corn market in the region, we have achieved a position among the top players in terms of sales within just twelve years”, Wielandt continues. “However, to implement our strategic targets - primarily related to the vegetable and plant-based food market - with full strength and focus, we have decided this is the right moment of business maturity to exit the business for genetically modified (GM) corn seed in South America. The transaction widens KWS’ flexibility in terms of pursuing our group-wide goals of independence and long-term profitability.”
The business will be taken over by GDM, a family-owned and Argentina-based company and a leading plant genetic supplier with worldwide operations.
"The combination of KWS's plant breeding expertise and leadership in corn with GDM’s leadership in plant genetics and our focus on soybeans and wheat, creates a unique synergy and strength for our market position and the continued advancement of our company,” says Ignacio Bartolomé, CEO and family representative of GDM. “We will keep working closely with the entire agricultural chain, continuing to provide the latest advances in plant genetics technology, with the producer as our main focus and yield as our central objective,” adds Bartolomé.
All activities for vegetables, sugarbeet and the counter-seasonal breeding programs for the European corn and sugarbeet portfolio in Brazil, Chile and Peru will remain with KWS. The European corn business will not be affected by the transaction. KWS strongly commits to the relevance of the company’s position in this European Business Unit, including market leadership for silage corn. Regarding the North American corn business, KWS evaluates various strategic options.
The transaction will generate sales proceeds in the mid three-digit million-euro range. The transaction is subject to certain closing conditions and regulatory approval by the relevant authorities. The transaction is expected to be completed within the second quarter of 2024 and will have a significant positive impact on the key financial figures of KWS.