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Monsanto to buy Netherlands based seed company

April 1, 2008, St. Louis, Mo – Monsanto Co. announced March 31 it
reached an agreement to buy Netherlands-based De Ruiter Seeds Group BV
for roughly $863 million (US), a deal that would greatly expand
Monsanto’s reach in the vegetable seed market.

April 1, 2008, St. Louis, Mo – Monsanto Co. announced March 31 it reached an agreement to buy Netherlands-based De Ruiter Seeds Group BV for roughly $863 million (US), a deal that would greatly expand Monsanto’s reach in the vegetable seed market.

Monsanto, the world’s biggest seed company, deals largely in commercial crops such as soybeans, cotton and corn. But it became a player in the fruit and vegetable seed business with its 2005 purchase of Oxnard, Calif.-based Seminis Inc.

De Ruiter will complement the product line Monsanto picked up
with Seminis, said Kerry Preete, president of Monsanto’s vegetable seed business. Seminis sells seeds for vegetables grown in crop fields, while De Ruiter produces seeds that are grown inside greenhouses, such as tomatoes, cucumbers and melons.

“They are the premier company in that space,” Preete said, referring to the greenhouse seed market. He said greenhouse seed sales are growing at roughly eight to 10 per cent annually and are more profitable than crop seed sales. De Ruiter has global annual sales of roughly $170.6 million.

Monsanto agreed to take on part of De Ruiter’s debt as part of the deal, but the company didn’t say how much. Preet said he hopes the deal will be finalized before the end of 2008, but he could not give a date for closing the purchase. The deal must be approved by several European-based regulatory authorities, he said.

Bank of America analysts Kevin McCarthy and B. Christian Massey were impressed with the deal, saying it should start adding profits to Monsanto’s bottom line within one to two years.

If it goes through, the deal could give Monsanto control of roughly 25 per cent of the annual $3 billion market in vegetable seeds, the analysts said in a note.