Bayer AG and Ginkgo Bioworks, a biotechnology company will create a new company focused on the plant microbiome.
Improving the microbes’ ability to make nitrogen fertilizer available for plants, offers a major potential benefit to sustainable agriculture.
The deal provides a Series A investment of $100 million by its parent companies and Viking Global Investors LP. The new company will be co-located with Ginkgo in Boston’s thriving biotechnology community and in West Sacramento, California, home of Bayer’s R&D activities around plant biologics.
The closing of the transaction is expected to occur in the fall of 2017.
The new company will focus on technologies to improve plant-associated microbes with a major focus on nitrogen fixation. While some crops such as soybeans, peas and other legumes can pair with specific microbes that live within the plant and fulfil their nitrogen needs, most other crops cannot.
Nitrogen fertilizer is, therefore, an essential component in modern agriculture. It can, however, add cost to growers when used inefficiently. In addition, use of nitrogen fertilizer is a major environmental concern, driving greenhouse gas emissions and water pollution. The endophytic microbes to be developed by the company aim to provide a platform to flexibly deliver new agronomic advantages. This is expected to have a profound positive benefit to growers, agriculture and society alike.
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