When Valagro formed a global agreement with Syngenta in July 2017 to supply biostimulants for seed treatment, few in the market could have predicted at the time that the under-the-radar partnership was setting the stage for something much bigger down the road. Flash forward to this week’s news of Syngenta Group’s acquisition of Valagro, and the crop protection giant is officially all-in on the global biologicals market.
“We are looking forward to welcoming the Valagro team to Syngenta Group,” said Erik Fyrwald, CEO of Syngenta Group. “This acquisition underlines our growth ambitions in this area and positions us as one of the strongest players in the global biologicals market. The investment also forms part of our $2 billion commitment to help farmers address the effects of climate change and improve agricultural sustainability as part of our Good Growth Plan.”
Jon Parr, President Global Crop Protection at Syngenta, added: “Significant levels of investment in innovations such as biologicals are necessary in order to deliver a sustainable future and help farmers deliver a food system working in harmony with nature. Syngenta Crop Protection and Valagro have a foundation in science-based innovation and are eager to collaborate, share knowledge, and build on each other’s capabilities. By fostering the entrepreneurial spirit and culture of Valagro, powered by our global scale and capability, together we will shape the future of the agricultural biologicals market.”
Here are four things to know about the deal:
- Valagro has a 40-year track record as a pioneer in bologicals. Valagro has grown from a small, entrepreneurial enterprise in a remote region of Italy into a global multinational company, recognized as a leader in its sector for its high quality of research and development, for the efficacy of its products, distributed in more than 80 countries worldwide. The company, founded in 1980, currently has 13 subsidiaries all over the world and it employs over 700 people. In addition to its production plant in Atessa, Valagro has another plant in Italy, one in Brazil, two plants in India, and two in Norway. Furthermore, the company announced the construction of a new plant located in the U.S.
- Biologicals market set to double in size over the next five years. According to Markets and Markets research, the global agricultural biologicals market size is estimated to account for a value of USD 8.8 billion in 2019 and is projected to grow at a CAGR of 13.6% to reach a value of USD 18.9 billion by 2025. The increasing trend of sustainable agriculture in the global market, low residue levels, and supportive regulations are the key factors driving the growth of the market.
- Acquisition reinforces Syngenta’s sustainability strategy. This deal is fully in-line with Syngenta Crop Protection’s strategy to provide growers with additional complementary choices of products and technologies in order to effectively and sustainably care for their crops by managing resistance, enhancing soil health, reducing residues in crops, and addressing consumer demands. The deal is part of the company’s Good Growth Plan.
- Valagro will continue to operate as an independent brand. Following the close of this transaction, Valagro will continue with its current management team and maintain its brand and distinct business name. Its headquarters, manufacturing plants around the world, and the R&D center based in the province of Chieti, in the Abruzzo region (Italy), will continue their operations ensuring the continuity of the business, together with current employment and manufacturing levels.
“The entry of the Valagro Group into Syngenta Crop Protection is a strategic choice for us, as we provide the company with considerable resources that could help us advance our efforts to develop environmentally-compatible, safe and efficacious products for our customers around the world,” said Giuseppe Natale, CEO of Valagro. “Valagro has recognized Syngenta Crop Protection as the industry player who can best support it in this step.”
Financial terms of the deal were not disclosed.