Pannar, Pioneer deal set to close

2012-09-18 00:00

GREYTOWN-BASED Pannar Seed is set to move full steam ahead on its deal with global agricultural business DuPont Pioneer following the Supreme Court of Appeal (SCA) decision to reject an application from the Competition Commission.

The commission had sought leave to appeal against the Competition Appeal Court’s approval of the merger in May this year. DuPont Pioneer, which forms part of the multinational chemical company, plans to buy a majority stake in Pannar.

Pannar managing director Deon van Rooyen told The Witness yesterday that they were poised to proceed with the implementation of the deal.

“We are obviously very keen to move forward with the deal. Our business is tied to the agricultural season. It is good that the decision has come pretty early in our planting season … so there is time for us to start talking about the research and collaboration and what we can do this season …”

Van Rooyen confirmed that the parties’ initial pledge of a R62 million investment in a regional research and development centre in South Africa remained, and that over the next six years Pioneer would spend a further R20 million on programmes for developing farmers in South Africa.

Pannar, which was established 54 years ago in Greytown, has operations throughout southern Africa and in Argentina, the U.S. and Europe. It employs about 660 people in South Africa, 300 of them in Greytown.

Van Rooyen said the process had been a long one. “It’s almost two years to the day. We made the announcement on September 15, 2012.”

Pannar was pleased that the Competition Appeal Court had appreciated the complex and technical nature of the business, which was underpinned by innovation, he added.

“By combining the maize genetics of Pioneer and Pannar and applying advanced technologies to it, we can make a major impact on improving farmers’ productivity in South Africa and Africa through the ongoing development of a pipeline of very competitive maize hybrids.

“There will also be a positive impact on our other areas of crop research, notably wheat, sorghum, sunflower, soyabeans and dry beans.

“The improved cultivar performance and choices will have a very positive impact on farmer productivity, especially in maize, leading to enhanced food security …

“Competition in the market will also increase.”

A competition lawyer with Shepstone & Wylie, Jennifer Finnigan, told The Witness the SCA’s decision had brought a welcome note of reason to the merger approval process.

“While the commission’s appeal was ostensibly against a different market approach adopted by the Competition Appeal Court as the losing party, the commission also had to pay Pannar’s costs of the appeal.

“Despite the fact that the ‘loser pays’ rule is well established, much was made by the commission of the fact that adverse costs orders hampers its ability to do its job. While the commission’s approach to markets and business operates in the ideal world, fortunately the higher courts seem to have some appreciation of business reality.”

Pioneer president Paul E Schickler said in a statement: “This partnership will accelerate the development of higher performing products for Africa’s farmers.”

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