According to a recently published report by MarketsandMarkets Research, the global agrochemical market has grown significantly between 2000 and 2016. This growth has been matched by a flurry of M&A activity. In particular, the report highlights that:

  • the global agrochemical market grew from $28.78 billion in 2007 to $41.12 billion in 2013. This represents a growth of 43% over six years;
  • intense competition between the top players in the agrochemicals market has caused extensive consolidation over the previous decade. The top six companies now dominate more than 80% of the industry's market share;
  • crop protection chemicals and herbicides were the most active areas for M&A activity and investment over this time period; and
  • there is a trend of assets being acquired by companies for use in emerging markets with large agricultural potential. The largest number of deals (by acquirer) were witnessed by companies headquartered in the Asia-Pacific region as a result of extensive crop cultivation potential in India, China and Japan. The largest number of deals (by target) were witnessed by companies headquartered in Europe and North America. The most active companies were Monsanto (U.S.), Bayer AgroSciences (Germany) and Syngenta AG (Switzerland).

The report concludes that M&A activity is expected to continue as a result of an increased focus on research and development, increased emphasis on intellectual property rights, and the growth of international agricultural markets. The transaction between Dow Chemicals and DuPont announced in Q4 of last year is proof positive that significant market consolidation is still underway in the fertile agrochemical industry.

The author would like to thank Danny Urquhart, articling student, for his assistance in preparing this legal update.

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