KWS SAAT SE & Co. KGaA Sells Corn Business in South America to GDM

KWS SAAT SE & Co. KGaA, also known as KWS, announced the sale of its corn business and related licenses in South America to Buenos Aires-based GDM. This transaction includes the sale of KWS’s subsidiaries in Argentina, Brazil, Uruguay, and Paraguay, and aims to streamline KWS’s focus on profitable growth and strategic realignment. The agreement, valued in the mid-three-digit million Euro range, is poised to significantly benefit KWS's financial indicators by reducing debt and interest expenses while improving the net debt/EBITDA ratio and equity ratio.

The divested business, which generated around EUR 320 million in sales during the 2022/2023 financial period with an average EBIT margin of about 10%, represents KWS’s commitment to assessing long-term opportunities and risks within its market strategies. Following this sale, KWS aims to reduce its business footprint in South America, focusing instead on its vegetable, sugarbeet segments, and counter-seasonal breeding programs in select South American countries, alongside maintaining its European and investigating its North American corn business strategies.

Expected to close in the second quarter of 2024, subject to regulatory approvals, this transaction highlights the shifting dynamics within the global agricultural sector and KWS’s strategic positioning for future growth. GDM, a family-owned global plant genetics company with a strong presence in wheat and soybean genetics, expands its footprint with this acquisition, indicating a strategic move within the South American agricultural sector.