You lifer lawn care pros, take a stroll with me down memory lane circa 1985. Remember Stauffer Chemical, Milliken Chemical, Velsicol and Mallanckrodt? You surely recall Union Carbide, right? They, and other now mostly forgotten companies, developed and marketed product for your lawn care business 30 years ago.
For you “youngsters” devoting a mere 25 years of your working life in the business, how about Ciba-Geigy, Fermenta, ICI Americas, Mobay, NOR-AM, Rhone Poulenc and Sandoz? These were some of the companies in and around 1990 that provided chemical products to help keep clients’ lawns green as well as weed- and pest-free.
Where did they all go?
The short answer: mergers and acquisitions, with some companies selling their specialty chemical business and leaving the turf and ornamental (T&O) market altogether.
Assuming you had attempted to draw a chart of all of this activity over the past 35-years; your drawing would look very much like the creation of some lunatic spider. Not that the web would be done. You likely will be adding new inter-connecting strands to this piece of art again soon.
Three blockbuster mergers in the agrochemical/seed industry have been proposed this past year: Dow Chemical-DuPont; Syngenta-China National Chemical Corp. (ChemChina) and Monsanto-Bayer, with the later two industry giants announcing on September 14 their intention to merge in a transaction pegged at $66 billion.
The likelihood of all three mergers being finalized depends upon factors beyond the scope of this article. But key among them are financing, as the numbers are staggering, and lengthy reviews and daunting regulatory hurdles — processes that could take months to work through.
What makes these proposed mergers unlike others that have dramatically changed the agrochemical/seed industry this past half century is their unprecedented size — about $145 billion in total, according to The Epoch Times.
M&A activity within that universe itself comes as no surprise. The so-called “Big Six” firms of Monsanto, Syngenta, Bayer, DuPont, Dow and BASF between 1985 and 2000 acquired about 75 percent of small- to medium-size firms engaged in biotechnology research, reports the Iowa Farmer Today.
Like any other maturing industry, companies merge seeking (and counting on) synergies, in these crop protection chemicals and evolving food/fiber seed technologies that will improve their margins. Indeed, size does matter when it comes to research and development of biotech solutions and bringing new crop protection molecules or seeds to market. The process takes a decade or more and costs well north of $100 million. That research to protect and boost plant health can, and often does, end up benefiting the T&O market as well.
At this time, it’s much too early to speculate on the impact of these mergers (should they occur) and what they may mean in improving and bringing new plant health solutions to the professional lawn care market.
It’s safe to opine, however, that given the strength and continued growth (albeit not as a robust as most of us would like to see) of the lawn and maintained landscape market, that these major players will continue to support this segment of their business.
There is nothing to suggest that America’s love for their turfgrass lawns and other greenery will lessen in the future.
Read more: Mergers from an Employee’s Perspective