Origin Agritech has also announced that it is in negotiations to acquire an integrated seed company specializing in hybrid rice company. If consummated, it would be a cash deal.
Origin Agritech Limited in Negotiations to Acquire an Integrated Seed Company in the PRC Specializing in the Development, Production and Sale of Hybrid Rice
Tuesday December 6, 9:24 am ET
BEIJING, China and SAN DIEGO--(BUSINESS WIRE)--Dec. 6, 2005--Origin Agritech Limited (NASDAQ: SEED; SEEDW and SEEDU) ("Origin") announced today that it has commenced negotiations on a memorandum of understanding with a complimentary integrated seed company in the PRC that specializes in the development, production, and sale of hybrid rice seed. The acquisition, if consummated, is anticipated to be completed early in 2006 and be an all cash transaction.
The acquisition is subject to completion of a due diligence review, negotiation of a definitive acquisition agreement, and satisfaction of various closing conditions.
Dr. Gengchen Han, the Chief Executive Officer said in connection with the potential acquisition, "We are very excited about potentially acquiring this vertically integrated seed company. It has many attributes that make it particularly attractive for us. First, it presently has a significant presence in the hybrid rice market in China, a market we have only recently entered last year. As a result of the acquisition we will immediately reach a size in the rice market that will allow us to achieve the economies of scale that we are now beginning to see in the corn market. Second, the company has a proprietary pipeline of rice hybrids that enhance our prospects for the future. Third, the acquisition is synergistic in that the distribution networks, when integrated, will now be able to sell, where applicable, two different seed products to the same farmers. And fourth, the management team of the to be acquired entity is very capable, and will further strengthen our ability to grow profitably in the future."
About Origin
Founded in 1997, Origin specializes in the research, development, production, sale and distribution of hybrid corm rice and cotton seeds in China. The Company owns or leases facilities in, among other locations, Beijing, Gansu, Henan, Helongjiang, Liaoning, Jilin, Hainan and the Sichuan Provinces, and also has an office in San Diego, CA. Origin launched its first entirely internally developed seed in 2003 and in 2004 introduced four new proprietary corn hybrids to the market. In 2005 Origin had five new proprietary corn hybrids and one new proprietary cotton hybrid approved by the government registration office. Origin anticipates that it will introduce approximately 40 new proprietary products into the Government testing and approval cycle between now and 2008.
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