Cyanamid Agro is the demerged agrochemicals entity of the erstwhile Cyanamid India (now rechristened Wyeth Lederle). ACCO Industries, on the other hand, operates as a merchant exporter and currently figures in both the sundry debtors and creditors columns of Cyanamid Agro's balance sheet. Acco also plans to set up a new facility at Silvassa at an investment of over Rs 20 crore.

While details on the deal could not be got, indications are that the move will help the Indian arm cash in on the existing production and marketing synergies. Besides, a subsidiary status may also give Cyanamid Agro access to more hi-tech products from the parent company's pipeline. The American parent is a global leader in the herbicides segment and leading brands include Arsenal, Assert, Cadre, Prowl and Pursuit.

A consolidation of Cyanamid Agro's operations could also throw open additional business vistas given that the American parent had been looking to its Indian subsidiary as a sourcing base for specific products, based on the "cost economies". The Indian subsidiary is already the key supplier of the active ingredient for Abate, a mosquito larvicide. Supplies of the product to group companies across the globe are understood to be in the region of 150 tonnes, though no official word could be got.

Besides, the proposed merger, analysts say, is also expected to have an impact on Lalbhai group company Atul's holding in Cyanamid Agro. As on March 31, 1999, the Atul group held roughly 13,67,845 shares in Cyanamid Agro.

The latest merger move comes roughly two years after after the demerger of Cyanamid India's agrochemicals undertaking into a separate entity. The demerger was done at a ratio of 1:1.