From Staff Reports
Monsanto Co. (MON) said Tuesday it has purchased the Brazilian corn-seed company Agroeste Sementes for about $100 million.
The specific terms of the all-cash deal were not released. Monsanto said the deal included all of Agroeste's businesses, including its corn-seed brands. Monsanto said the purchase will enhance its own existing corn-planting portfolio. As a result, it believes it will be better able to deliver new higher-yielding seeds to Brazilian farmers.
"Agroeste will serve as an important complement to our existing national brand approach in Brazil," said Brett Begemann, Monsanto's executive vice president of global commercial. "The acquisition will allow our companies to provide new and innovative higher-yielding seed offerings through multiple brands and will bolster our genetics platform for the introduction of our trait technologies longer term."
The Brazilian firm specializes in “hybrid” corn-seed production, and sells to farmers all over Brazil. Of the 30 million acres of corn these farmers planted for the 2006-2007 growing season, about 23 million acres – or nearly 77% – was planted with the hybrid seeds. And Agroeste's seed-corn products are now used on roughly 10% of the planted corn acreage in Brazil, although Monsanto’s total seed-corn offerings sold in Brazil through the well-known DeKalb and Agroeste brand seed lineups are used on a full one-third of the corn-acreage in that country, according to Monsanto.
This purchase mirrors what Monsanto has been doing in its home U.S. market where it has been acquiring smaller U.S.-based seed companies in recent years, which has served to boost the number of outlets it has available to sell directly to farmers. In 2004, Monsanto formed a holding company, American Seeds Inc., or ASI, which was part of its strategy to continue acquiring regional seed dealers. Since then, Monsanto’s ASI unit has purchased such dealers as Landec Corp.'s Fielder's Choice Direct and Heartland Hybrids.
Related News and Story Links:
- CNNMoney.com: Monsanto Buys Brazilian Seed Corn-Company for About $100 Million.