Pioneer/Panaar merger gets CTC nod
THE Competition and Tariff Commission has approved the acquisition of the assets and liabilities of Pannar Seeds Zimbabwe by DuPont Pioneer in a deal worth about $30 million. The deal consolidates the two companies into a single entity operating under Pioneer Hi-Bred (Zimbabwe) (Pvt) Ltd. “Please be advised that the examination of the transaction involving the acquisition of the business assets and liabilities of Pannar Seeds (Private) Limited to Pioneer Hibred Zimbabwe (Private) Limited has been finalised,” the CTC said in a letter to the companies.
The Commission set conditions for the approval which include that the merged entity commits itself to producing at least 80 percent of the seed to be sold locally for each planting season.
“Further, that the merged entity commits itself to maintain, in Zimbabwe, the Pioneer and Pannar seed brands and varieties thereunder, as maybe approved from time to time by the Seed Services Institute and or any relevant authority,” the CTC said.
Pioneer has said that the consolidation of the two companies will allow both brands to build the foundation for profitable growth through improved revenues, an improved cost structure and improved liquidity positions.
Pioneer is the world’s leading developer and supplier of advanced plant genetics, providing high quality seeds to farmers in more than 90 countries.
Pioneer provides agronomic support and services to help increase farmer productivity and profitability and strives to develop sustainable agricultural systems for people everywhere.
The Pioneer Hi-Bred Zimbabwe and Pannar Seeds deal was brokered by prominent corporate lawyer Mr Addington Chinake of Kantor & Immerman.
Mr Chinake was instrumental also in the $265 million deal between Atlas Mara Co-Nvest Limited and the African Banking Corporation last year.
He was also credited for brokering the Astra Industries and Kasai Plascon Africa Limited and Hemistar Investments deal in which the two companies acquired more than 80 percent of Astra.
The seed business is critical especially in agro-based economies such as Zimbabwe. Industry experts say food security can only be guaranteed if there is seed security.
Since 1802 DuPont has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials and services.
Pioneer and Pannar have remained committed to agriculture in Zimbabwe during the entire time of economic uncertainty.
However, continued pressure on sales, revenue and profits as well as increasing bad debt write-offs, largely attributed to the continuing liquidity issues, have obligated the two companies to take a course that allows for survival of the two brands in the country even if under one organisation.