April 1, 2008

Monsanto to buy De Ruiter Seeds

Monsanto announced Monday it reached an agreement to buy Netherlands-based De Ruiter Seeds Group BV for around US$863 million, a deal to expand Monsanto's reach in the vegetable seed market.

Monsanto, which deals largely in crops such as soy and corn, became a player in the fruit and vegetable seed business with its 2005 purchase of Oxnard, California-based Seminis Inc.

Kerry Preete, president of Monsanto's vegetable seed business, said De Ruiter will complement the product line Monsanto picked up with Seminis.

Seminis sells seeds for vegetables grown in crop fields, while De Ruiter produces seeds that are grown inside greenhouses.

Preete said greenhouse seed sales are growing at roughly 8 to 10 percent annually and are more profitable than crop seed sales.

De Ruiter has global annual sales of roughly US$170.6 million.

Bank of America analysts Kevin McCarthy and B. Christian Massey said if the deal goes through, Monsanto could control roughly 25 percent of the annual US$3 billion market in vegetable seeds, the analysts said in a note.

Monsanto's stock dropped US$2.80, or 2.5 percent, to close Monday at US$111.50.