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Agrimarketing : 2008 Marketing Services Guide
Last summer, one of AgriMarketing's faithful readers sent me an intriguing note. With it he included a two-page spread that ran in the magazine's October 1991 issue showing the mergers within the farm equipment industry. His note read, "This chart has been on my bulletin board since it was published. I have taken it down a hundred times to make a copy for farmers who get engrossed in it. I think an update would draw a lot of attention." Well, I think he's right, so the AgriMarketing staff plowed ahead and took a shot it. See the next six pages for an update on the Seed, Crop Protection and Equipment industries. To assemble the charts, we stud- ied back issues of the magazine for acquisition announcements, went to company Web sites for their timelines, and contacted the companies directly. Once we assembled the first draft, we sent copies out to knowl- edgeable industry sources for their comments, changes and additions. Try as we might, I'm sure we missed a few. Please e-mail me your corrections at: LynnH@AgriMarketing. com. READING THE CHARTS Portions of the charts are quite com- plex, so here are some general "guideposts." 1. We chose the name "legacy" com- panies because that appears to be the industry's normal terminology. To quote Webster 's New World Dictionary : "Legacy: anything handed down as from an ancestor." 2. "Legacy" (ancestors) companies and brands start on the left hand column. 3. Moving toward the right, brand name and ownership changes are shown as they occur. 4. Today's corporate entities owning the brands are shown in the far right hand column. THIS YEAR'S DEALS With 15 days left to go in 2007 as this is being written, this year was relatively quiet on the deal making front compared to other years. The biggest news maker was Agrium's acquisition of United AgriProducts (UAP), forming the U.S.'s single largest retailer of crop inputs, including seed/traits, crop protection chemicals and plant nutrients. According to CropLife magazine's annual "CropLife 100" report, combining the two entities would result in an organization with nearly 800 outlets operating in nearly all 50 states, dwarfing the second largest, Helena with its 275 outlets. In the past few years, Agrium has been the most aggressive pur- chaser of retail organizations includ- ing its acquisition last year of Royster-Clark (which had acquired Terra's outlets) and ADM's chain in Kansas/Oklahoma last May. Headquartered in Calgary, AB, Agrium is also one of the world's largest manufacturers of plant nutri- ents. To read the news release, go to: http://www.agrimarketing.com/show_ story.php?id=47276. The next largest blockbuster was the "Cotton Seed Shuffle." In order to complete its acquisition of cotton seed market share leader Delta and Pine Land (D&PL), Monsanto was required to divest itself of its Stoneville business unit and other assets. Bayer CropScience pur- chased Stoneville and Americot, Lubbock, TX, purchased Monsanto's NexGen cotton seed line and other D&PL germplasm. In the seed/traits arena, Monsanto once again dominated the headlines when its American Seeds Inc. busi- ness unit acquired five seed compa- nies in 2007, bringing its total hold- ings to 25 brands, plus DeKalb and Asgrow. A FEW OBSERVATIONS Stepping back and looking at the big picture, the charts tell some pret- ty interesting stories. First, the "traditional" market leaders in seed (Pioneer) and equip- ment (John Deere) have been inac- tive on the acquisition front in the agricultural industry. In the crop protection industry, although not the overall market leader but cer- tainly a leader in one the product categories (glyphosate --- Roundup), Monsanto has been quiet as well. Over the years, I have heard each of those company's executives explain they are always "open to discussions about acquisitions" but prefer to concentrate their time and resources on developing new prod- ucts and growing their organiza- tions' organically. An interesting business plan that has served their organizations well. Second, although there have been scores of mergers and acquisi- tions within the seed industry, there are still many, many independently owned companies that continue to operate successfully (see page 28). Third, in the crop protection and equipment industries, while many of the" majors" have been very active in deal making, there have also been a number of start-ups and entries into the North American market from companies headquar- tered outside the U.S. In fact, in 1971, there were ten tractor manufacturers actively sell- ing into the North American mar- ket. In 2007, there are still ten (with different names, though). In the crop protection industry, there are 14 new entries in the North American market since 1980, nearly one every other year. MSG 2008 MARKETING SERVICES GUIDE 21 LEGACY COMPANIES THE NEW LEGACY COMPANIES SECTION by Lynn Henderson, Editorial Director Lynn Henderson
November December 2007
January February 2008