Crompton & Knowles and Bayer to Form Seed Treatment Joint Venture.

STAMFORD, Conn. and PITTSBURGH--(BUSINESS WIRE)--Sept. 17, 1998--Crompton & Knowles Corporation (NYSE:CNK) and Bayer AG, Germany, represented by its American subsidiary Bayer Corporation, announced today they have agreed in principle to form joint ventures to serve the agricultural seed treatment market in North America utilizing the Gustafson business entities.

Gustafson will be the basis of the 50/50 joint venture and will continue to be headquartered in Plano, Texas, under its current management. Gustafson Inc. currently operates as a unit of Uniroyal Chemical Company, a wholly owned subsidiary of Crompton & Knowles. Bayer will acquire a 50 percent interest in the Gustafson seed treatment business. When the agreement is concluded, the new joint ventures will serve as seed treatment units for both Crompton & Knowles and Bayer in North America. The value of the cash transaction was not disclosed.

"Both corporations will benefit from this joint focus on development of seed treatment technology and applications in North America," said Vincent A. Calarco, chairman, president and chief executive officer of Crompton & Knowles. "While Uniroyal and Bayer will continue to operate independently in other seed treatment markets around the world, Gustafson's access to the additional technical resources and expertise of Bayer will give it added capabilities in North America."

"Due to our wide range of active ingredients, Bayer already plays a major role in the world's seed treatment business. The synergies that will derive from these joint ventures will further the position of Bayer as a leading company providing innovative seed treatment technology to the seed industry and the farming community," said Dr. Jochen Wulff, president of Bayer's worldwide crop protection business group.

According to Emil Lansu, president of Bayer's American agriculture division, the joint ventures will provide enormous benefits to North America's farmers by accelerating the development of new chemical compounds and biologicals for seed treatment applications. "This action forms a very good channel for expanding the uses of our innovative synthetic chemistries, such as our imidacloprid-based crop protection products in this region of the world."

"The needs of farmers in North America are becoming more diverse and significant as agriculture continues to change," said T.G. Austin, president of Gustafson. "The seed industry and North American farmers recognize the economic benefits of Gustafson's uncompromising philosophy of bringing to the marketplace the best chemistry and biologicals possible for the protection of seed and seedlings from disease and insects. This philosophy has been very beneficial to North American agriculture in the past and will continue to serve the industry well into the future."

Founded in 1926, Gustafson is recognized worldwide for its outstanding seed treatment research and development, seed treatment chemistry and formulations, coatings, and equipment. Gustafson offers a diverse line of equipment and treatment products serving all major seed markets. Its product line is comprised of chemistry and biologicals from proprietary research and development, its parent companies and other major chemical and biological suppliers from around the world.

The agriculture divisions of Uniroyal Chemical and Bayer are respected worldwide as leaders in the research, development and marketing of plant protection products for agriculture and specialty markets, including seed treatment chemistry. Except for these seed treatment joint ventures, they will continue to operate independently.

Crompton & Knowles Corporation, Stamford, CT, is a global producer and marketer of specialty chemicals and equipment. The company had 1997 sales of $1.9 billion and employs 5,500 people.

Bayer Corporation, Pittsburgh, PA, is a research-based company with major businesses in health care and life sciences, chemicals and imaging technologies. The company had 1997 sales of $9.3 billion and employs more than 24,000 people. Bayer Corporation is a member of the worldwide Bayer Group, a $32 billion chemical and pharmaceutical company based in Leverkusen, Germany. Its Crop Protection Group is one of the world leaders in its field, with sales of $2.3 billion (1997) and 7,400 employees.