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DuPont in $1.7B venture
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August 7, 1997: 10:54 a.m. ET
Deal with Pioneer Hi-Bred will help in development of new crops
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NEW YORK (CNNfn) - DuPont will form a new alliance with Pioneer Hi-Bred International to develop new crops in a deal worth $1.7 billion, the company said Thursday.
As part of the agreement with the plant genetics company, DuPont will buy $1.7 billion of Pioneer's stock at $104 a share. DuPont will own 20 percent of the company and hold two of 15 seats on the board.
DuPont expects to take a charge of $1 billion against earnings, a reduction of roughly 2 percent, the company said.
"This … is an investment in the future of biotechnology and demonstrates our commitment to continue building DuPont's life sciences businesses," said John Krol, DuPont's chief executive, in a statement.
DuPont and Pioneer will invest more than $400 million in agricultural research in 1998 through a newly formed company, Optimum Quality Grains.
"The research capabilities … through this alliance will be unparalleled in our industry," said Charles Johnson, chief executive of Pioneer. "The world agriculture market is changing at a terrific pace."
Optimum will explore modifications of corn, soybeans, and other seeds to improve their composition of oil, protein and carbohydrates.
Farmers, livestock producers and consumers will benefit from the findings, the two companies said.
DuPont, based in Wilmington, Del., (DD) is a global chemical, energy and life sciences company.
Pioneer, headquartered in Des Moines, Iowa, (PHB) develops seeds and other products for farmers and grain processors.
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