Business Concentrates MERGERS & ACQUISITIONS
Agricultural, chemical, and seed deals ripen Milestones are hit in all three global agchem transactions now in play Last week saw two agricultural chemical deals—Dow Chemical’s merger with DuPont and ChemChina’s purchase of Syngenta—move closer to consummation. Meanwhile, another potential transaction—Bayer’s unsolicited bid for Monsanto—became less likely. At special meetings held July 20, Dow and DuPont shareholders overwhelmingly approved the $130 billion merger between the two firms. “We are pleased to receive such strong support from our stockholders,” said DuPont CEO Ed Breen. “We are now focused on important next steps toward completing the merger transaction, including working with regulators in the appropriate jurisdictions.” The companies expect to form DowDuPont during the second half of this year. The new company will be the world’s largest supplier of crop protection chemicals and seeds. Within two years of its formation, DowDuPont will split into three more specialized firms: an ag business, a materials science company, and a specialty products firm. The vote wasn’t without drama. The Action Network Fund, working on behalf of Keep Your Promises DuPont, which advocates for victims of perfluorooctanoic
acid exposure, wrote a letter to the boards of both DuPont and Dow. It warned that PFOA liabilities could spill over to the combined company should the DuPont spin-off Chemours, which has indemnified DuPont from the liabilities, be unable to pay. Chemours’s liabilities related to personal injury lawsuits and environmental remediation could amount to billions of dollars, the activists say. The argument didn’t sway many shareholders. Roughly 97% of Dow and 98% of DuPont shareholders voted for the transaction. Separately, the board of the current agrochemical and seed leader, Monsanto, rejected a new bid from rival Bayer. On July 14, Bayer increased its offer for the St. Louis-based firm from $122.00 to $125.00 per share, bringing the total transaction value, including debt, to $65 billion. It also promised Monsanto a $1.5 billion fee should regulators block the transaction. Monsanto said the new offer still isn’t enough, though in a conciliatory tone the firm’s board noted that it “remains open to continued and constructive conversations with Bayer and other parties.” Bayer expressed its disappointment with Monsanto’s stance and called its offer a
This Syngenta scientist may soon be working for ChemChina. “compelling opportunity” for Monsanto shareholders. In addition to the courtship with Bayer, Monsanto is reportedly talking with BASF about a possible purchase of the German firm’s agrochemical unit. And in yet another agrochemical deal, ChemChina is buying the 40% stake it didn’t already own in the generic crop protection chemicals firm Adama from the Israeli company Discount Investment. The transaction values Adama at about $3.5 billion. The purchase will allow ChemChina to combine Adama with its own Sanonda crop protection unit. Israeli newspapers insinuated that the purchase also clears obstacles by which Discount Investment might have been able to block ChemChina’s purchase of Syngenta. The Syngenta transaction has been taking longer than expected. ChinaChina recently extended its tender offer for Syngenta to Sept. 13. The offer was previously set to expire July 18.—ALEX TULLO
START-UPS
CREDIT: SYNGENTA
Small-molecule start-up Fulcrum launches Fulcrum Therapeutics has launched with $55 million in funding from the investment firm Third Rock Ventures to develop small molecules that can turn errant protein expression on or off. Like all Third Rock-backed companies, Fulcrum gestated inside the venture firm’s labs for several years before making its debut last week. The biotech’s discovery engine is based on several emerging areas of science: developing safe and selective small molecules to modify gene expression, generating induced pluripotent stem (iPS) cells from patient skin cells, and using the gene
editing tool CRISPR to validate drug targets. Fulcrum will first go after two rare diseases that lack treatments. For the cognitive disorder fragile X syndrome, the company will try to activate the production of FMRP protein. For fascioscapularhumeral muscular dystrophy, the goal is to prevent muscle cell death by turning off expression of the DUX4 gene. Fulcrum launched with 10 employees, a number that will grow to about 40 by the end of 2017, says CEO Robert Gould, who previously led the small-molecule epigenetics firm Epizyme. Most of those hires will be sci-
entists, including experts in iPS cell biology, bioinformatics and computational biology, and translational medicine. Researchers in that last area—who are moving discoveries out of the lab and into the clinic—are being brought on early in acknowledgment of the challenge of designing trials for rare neurological and muscle disorders. “The translational medicine piece is really critical,” Gould says. For example, a study on a disease-modifying drug for fragile X has never been done; Fulcrum will need to figure out the right questions to ask.—LISA
JARVIS JULY 25, 2016 | CEN.ACS.ORG | C&EN
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