Mitsui Chemicals Agro to acquire Meiji Seika Pharma’s agrochemicals business

Mitsui Chemicals, Inc. (Tokyo: 4183; President & CEO: HASHIMOTO Osamu) today announced that its wholly owned subsidiary Mitsui Chemicals Agro, Inc. (Tokyo; President & CEO: OZAWA Satoshi) has agreed to acquire the agrochemicals business of Meiji Seika Pharma Co., Ltd. (Tokyo; President and Representative Director: KOBAYASHI Daikichiro).
 
1.Background and objectives of the acquisition

The Mitsui Chemicals Group is engaged in efforts to resolve social issues via its business activities and has positioned the agrochemicals business as a targeted business domain, aiming with this to help solve food problems, which pose a global challenge.
 
As the core enterprise in the Mitsui Chemicals Group’s agrochemicals business, Mitsui Chemicals Agro  is  leveraging proprietary  active  ingredients  created  on  the  back  of  its organic  synthesis capabilities, pursuing here a growth strategy that calls for agrochemicals business expansion both within Japan and overseas via region-specific strategies, as well as for the extended reach of its professional pest management business. Through this strategy, Mitsui Chemicals Agro seeks to become an R&D-driven company with a global presence in the agrochemicals field by promoting sustainable agriculture and helping to improve quality of life.
 
As a business with a strong emphasis on R&D, Meiji Seika Pharma’s agrochemicals business has set out a vision to help solve global food problems by supplying agrochemicals designed with the environment in mind and by improving agricultural productivity. Meiji Seika Pharma’s agrochemicals business possesses tremendous R&D capabilities in this realm, highlighted by unique agrochemicals that include probenazole, the world’s first systemic acquired resistance type fungicide; glufosinate-P, a distinctive non-selective herbicide;  and flupyrimin, an insecticide designed with environmental impacts on bees and other pollinators in mind, sales of which are being promoted worldwide.
 
The  deal  will  see  Meiji  Seika  Pharma’s  agrochemicals  business  portfolio  of  active  ingredients, domestic  and international  customer  base  and  drug  discovery,  formulation  and  natural  product technologies integrated with that of Mitsui Chemicals Agro, thereby enabling the Mitsui Chemicals subsidiary  to  enhance  its  presence  in  the  Japanese  market  and  speed  up  its  expansion  into agrochemical markets overseas, where future growth is anticipated. The move will also help bolster Mitsui Chemicals Agro’s ongoing creation of new active ingredients along with its development of products that meet the needs of the market, promising then to accelerate the fulfillment of Mitsui Chemicals Agro’s growth strategy and, more broadly, Mitsui Chemicals’ Long-Term Business Plan.
 
2.Business acquisition scheme

Meiji Seika Pharma will establish a new company and carry out an absorption-type split by transferring all  shares  in  its  agrochemicals  business  and  related  subsidiaries  to  this  new  company.  Mitsui Chemicals Agro will then acquire all shares issued by the new company and make it a wholly owned subsidiary. While the new company will be operated as a subsidiary of Mitsui Chemicals Agro for the time being after acquisition, Mitsui Chemicals plans eventually to merge Mitsui Chemicals Agro with the new company in aim of achieving further business growth through the creation of synergies.
 
3.Overview of the business to be acquired

(1) Business R&D, manufacture, sale, export and import of agrochemicals
(2) Branch offices  Sapporo, Sendai, Tokyo, Nagoya, Osaka, Kumamoto
(3) Research Odawara Field Center (Personnel, equipment, etc.)
(4) Subsidiaries Manufacturing subsidiary Meiji Agrochemical Co., Ltd. (Iwate)
Sales subsidiary Meiji Pharma Korea Co., Ltd.
(5) Employees Approximately 110 on a consolidated basis
 
4.Outlook

As the impact of this deal on the financial performance of the Mitsui Chemicals Group will be minor, there is no change to the earnings forecast.