Monsanto to pay $1B for Seminis
Purchase of seed company is seen as an effort to move away from competitive agro-chemical business.
January 24, 2005: 11:30 AM EST
KANSAS CITY, Mo., (Reuters) - Agriculture products company Monsanto Co. said Monday it will buy vegetable and fruit seed company Seminis Inc. for about $1 billion in a move to capitalize on the trend toward healthier diets and enhance its portfolio of seed operations.
Monsanto (down $1.37 to $56.35, Research) will also assume about $400 million in debt and will make a performance-based payment of up to $125 million by the end of fiscal 2007.
Monsanto, a leading developer of genetic modifications for crops like soybeans and corn, said biotechnology modifications to Seminis' fruits and vegetable lines were an option over the long term.
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Seminis, which supplies more than 3,500 seed varieties to commercial fruit and vegetable growers, dealers, distributors and wholesalers, currently offers a genetically modified squash, according to Monsanto.
Seminis' seeds are sold in more than 150 countries around the world. The company is based in Oxnard, California.
Monsanto has been shifting its business focus from the highly competitive herbicide chemical business to the seed industry, where Monsanto has been seeing strong growth. Late last year, Monsanto created a new subsidiary called American Seeds Inc. and bought regional seed business ChannelBio Corp. of Kentland, Indiana.
Seminis will operate as a own wholly owned subsidiary of Monsanto, officials said.
Monsanto already controls an estimated 14 percent of the U.S. corn seed market and through licensing arrangements provides germplasm and technology traits that extend its influence into about one-third of the U.S. market.