Atanor to Sell Mills as It Eyes Bayer-Monsanto Disposals

  • Atanor chairman says company wants to focus on crop protection
  • Says sale of two sugar mills will fetch about $200 million

Atanor SA, an Argentine chemicals producer, plans to sell a pair of sugar mills for about $200 million as it focuses on its crop protection business, and eyes assets that may be sold in a Bayer AG-Monsanto Co. merger, the chairman said.

Atanor is divesting two mills in Tucuman province, although there’s no urgent need to sell, Chairman Marcelo Dumanjo said Tuesday in Buenos Aires. The company has 10 percent of the South American country’s market share of crop-related items such as pesticides worth $2.5 billion.

"We have a strategic plan to focus on our core business at the time the sugar price is increasing," said Dumanjo, 52. "We would use proceeds from the sale to grow organically in the crop protection business and to be ready for opportunistic acquisitions that may arise from a Bayer-Monsanto deal."

Since April 2012, when he became president of Atanor, Dumanjo has reduced the company’s debt to $27 million from about $200 million. The Buenos Aires-based company had been in technical default with banks such as Credit Suisse Group AG and Rabobank Groep. Selling the mills would provide cash for acquisition targets that may need to be divested for regulatory reasons to allow the Bayer purchase of Monsanto, Dumanjo said.

Ready for Divestitures

Bayer agreed to buy Monsanto in a deal valued at $66 billion, winding up four months of talks to create the world’s biggest supplier of seeds and pesticides. Sugar futures in New York have climbed about 36 percent in the past year.

Atanor produces pesticides such as glyphosate to protect soybean crops as well as pesticides for corn and wheat crops. Argentina is the world’s third-largest producer of soybeans behind the U.S. and Brazil, and the biggest exporter of soybean meal and oil.

"In Argentina there may be some minor targets after antitrust revisions, but for sure the Brazilian antitrust body will ask for considerable divestments and we would like to be ready," he said.

One of the Argentine sugar mills to be sold is Cia. Azucarera Concepcion SA, which Atanor bought in 2005 for $7 million, plus the assumption of $60 million in debt. Albaugh LLC, of the U.S., owns 80 percent of Atanor, while China’s Huapont Nutrichem owns the rest.

Atanor doesn’t rule out an initial public offering in the next few years, Dumanjo said. He forecasts Argentina will increase its corn planting this season to 5 million hectares (12.4 million acres) from 3.5 million last season, with the soybean area holding steady at 20 million hectares.

MBA Lazard is Atanor’s financial adviser on the sale of the sugar mills.

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