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Seeds of discontent
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November 13, 1998: 9:05 a.m. ET
Schering exec ignites embarrassing row over seeds deal with Cargill
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LONDON (CNNfn) - An embarrassing flap has broken out between Germany's premier pharmaceuticals company and one of its largest subsidiaries.
Schering and AgrEvo have fallen out over the subsidiary's deal to buy the seed business of U.S.-based Cargill for the announced price of $650 million.
Berlin-based Schering owns 40 percent of agrochemical manufacturer AgrEvo, a joint venture with chemicals giant Hoechst.
AgrEvo described as a "mystery" comments by Schering chief financial officer Klaus Pohle that the deal price was likely to be revised down to as low as $350 million because of a lawsuit involving Cargill. "These statements do not reflect our position," said an AgrEvo spokesman.
After AgrEvo announced the acquisition, Cargill received a writ from Pioneer Hi-Bred (PHB), alleging patent infringement. As a result, Pohle this week told reporters the price could be lowered, to between $350 million and $500 million.
Pohle's comments appear to have taken both AgrEvo and Cargill by surprise. Cargill denied any talks on lowering the price had begun, and AgrEvo reiterated Friday that the original $650 million price stands - unless the lawsuit, described as baseless by Cargill, proves to have serious financial consequences.
A Schering spokesman described the matter as an unfortunate misunderstanding, but there's little doubt the situation has inflamed feelings at AgrEvo.
Pohle's estimates of a possible $250 million price reduction can only serve to strengthen Pioneer's lawsuit, and appears to have infuriated Cargill and AgrEvo.
To make matters more embarrassing, Pohle is also chairman of the supervisory board at AgrEvo, and will be closely involved in negotiations over the seed business.
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