EINBECK (dpa-AFX) - The seed producer KWS Saat is selling its corn business including licenses in South America. The sale price is in the mid three-digit million euro range, the company announced late Monday evening. The buyer is the Argentinian family-owned company GDM.

The transaction will have a clearly positive impact on key financial figures, the press release continued. The majority of the proceeds from the sale will be used to repay loans. A significant improvement in financial leverage (net debt/Ebitda) and the equity ratio as well as a significant reduction in interest expenses can therefore be expected in the future.

The divested business activities reportedly generated net sales of around EUR320 million in fiscal year 2022/2023 with an average EBIT margin of around ten percent. Upon completion of the transaction, KWS will significantly reduce its business activities in South America. All business activities in the areas of vegetables and sugarbeet as well as the breeding programs for the European corn and sugarbeet portfolio in Brazil, Chile and Peru will remain part of the Group. With regard to the North American corn business, KWS is examining various strategic options.

The transaction is subject to customary regulatory approvals and closing conditions. The company expects the transaction to be completed in the course of the second quarter of 2024.

KWS had slipped deeper into the red in the first half of fiscal 2023/24, partly due to the weakening corn business. The further outlook for the segment is likely to become gloomier.

Investors were pleased with the step taken by the company's management. In an initial reaction, the KWS share rose by a good three percent on the Tradegate trading platform./he