Novozymes Agrees to Purchase Merck KGaA Crop Science Unit for $275 Million

Novozymes Agrees to Purchase Merck KGaA Crop Science Unit for $275 Million: Novozymes A/S, the world’s largest maker of industrial enzymes, agreed to buy Merck KGaA’s bioagriculture science unit for $275 million, adding a range of products designed to improve yields.

EMD/Merck Crop BioScience, which makes natural inoculants to improve plant health, has had an average annual growth of about 15 percent over the last seven years, with expected sales this year of $60 million, Novozymes said in a statement today.

The company will be integrated in Novozymes’ BioBusiness unit, where research and development costs currently eclipse profits. Novozymes entered the bioagricultural business in 2007 with the acquisition of Philom Bios of Canada. The Bagsvaerd, Denmark-based company also bought Brazilian microorganism maker Turfal on Aug. 12.

“This purchase doubles Novozymes’ size in the BioBusiness segment and increases their ability to drive future growth,” said Jens Houe Thomsen, an analyst at Jyske Bank A/S, in an e- mail.

The BioBusiness unit aims to reach Novozymes’ targets of more than 10 percent annual organic sales growth and more than 20 percent operating profit margin by 2018.

“EMD/Merck Crop BioScience has a strong strategic fit with our existing BioAg business,” said Steen Riisgaard, chief executive officer of Novozymes, in the statement. “Sustainable products and technologies will in the future play an even greater role in the agricultural industry as they allow effective and more sustainable ways to grow crops.”

Merck is based in Darmstadt, Germany.