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Monsanto expands into fruits and vegetables

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  • Laura Haddaway
    Important to all us raw and/organic fooders, who needs the genes of animals put in our fruits and veggies? News Update From The Campaign ... Dear News Update
    Message 1 of 3 , Jan 31, 2005
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      Important to all us raw and/organic fooders, who needs
      the genes of animals put in our fruits and veggies?

      News Update From The Campaign

      Dear News Update Subscribers,

      In a move that opens the door to the aggressive
      marketing of biotech fruits and vegetables, Monsanto
      has agreed to purchase Seminis, the world's
      largest producer of fruit and vegetable seeds, for
      about $1 billion.

      Monsanto seems to be downplaying the significance of
      this move in relation to genetically engineered fruits
      and vegetables. In a somewhat coy statement, their
      chief executive officer, Hugh Grant, stated "In the
      long term, there may be opportunities in biotech."

      Many activists feel this is a gross understatement and
      that Monsanto will push hard to bring genetically
      engineered vegetables and fruits out sooner rather
      than later. Some insiders speculate that Monsanto
      wants to get a significant variety of biotech crops
      into the marketplace quickly while the Food and Drug
      Administration (FDA) regulations are still incredibly
      lax. (there is really no research in this by the FDA
      - frightening - Laura)

      Until recently, a significant focus of Monsanto was to
      move forward on the introduction of genetically
      engineered wheat. However, U.S. and international
      opposition to biotech wheat caused the company to
      shelve those plans in the short term.

      Some feel this new grandiose move by Monsanto into the
      fruit and vegetable market is a strategic move to gain
      broader acceptance of biotech crops. They
      feel Monsanto will then again try to move forward with
      genetically engineered wheat.

      Monsanto is considered by many to be one of the
      world's most controversial companies. The company has
      faced numerous legal charges over the years
      that continue even in recent days.

      In 2001, Monsanto was found guilty of releasing tons
      of PCBs into the city of Anniston, Alabama and
      covering up its actions for decades. The jury
      found Monsanto liable on all six charges it
      considered: negligence, wantonness, suppression of the
      truth, nuisance, trespass and outrage. Under Alabama
      law, the charge of "outrage" requires conduct "so
      outrageous in character and extreme in degree as to go
      beyond all possible bounds of decency so as to be
      regarded as atrocious and utterly intolerable in
      civilized society."

      Most recently, on January 6, 2005, the U.S. Securities
      and Exchange Commission (SEC) filed two settled
      enforcement proceedings charging Monsanto
      with making illicit payments in violation of the
      Foreign Corrupt Practices Act (FCPA). It appears that
      Monsanto had bribed more than 140 current and
      former Indonesian government officials and their
      families by an amount totaling more than $700,000
      between 1997 and 2002. The cash was paid to allow the
      company to develop genetically engineered crops in

      The SEC lawsuit charged Monsanto with violating the
      FCPA and imposed a civil penalty of $500,000. They
      also issued an administrative order finding that
      Monsanto violated the anti-bribery, books-and-records,
      and internal-controls provisions of the FCPA and
      ordered the company to cease and desist from
      such violations. Further, the U.S. Department of
      Justice filed criminal information charging that
      Monsanto violated the anti-bribery and books and
      records provisions of the FCPA. Monsanto agreed to pay
      a $1 million monetary penalty to defer prosecution
      charges by the Department of Justice.

      Considering the track record of Monsanto, you might
      think that the FDA would closely scrutinize any new
      genetically engineered crops the company plans to
      bring to market. But under current FDA regulations,
      Monsanto is not even required to notify the agency
      that they are bringing out a new genetically
      engineered crop (unless the nutrient value is
      significantly altered or the product contains a known
      allergen.) Apparently the FDA trusts Monsanto
      to do the right thing. Do you?

      Posted below are three articles about Monsanto's $1
      billion purchase of Seminis. The first article from
      the Wall Street Journal is titled "Monsanto Co. to Pay
      $1 Billion For Produce-Seed Firm Seminis." The second
      article from the Associated Press is titled "Monsanto
      to buy seed company Seminis in
      $1B deal." And the third article from The New York
      Times is titled "Monsanto Buying Leader in Fruit and
      Vegetable Seeds."

      Craig Winters
      The Campaign
      PO Box 55699
      Seattle, WA 98155
      Tel: 425-771-4049
      E-mail: mailto:label@...
      Web Site: http://www.thecampaign.org


      Monsanto Co. to Pay $1 Billion For Produce-Seed Firm

      Staff Reporter of THE WALL STREET JOURNAL
      January 25, 2005

      Monsanto Co., looking for places to grow after
      converting many of America's corn, soybean and cotton
      farms to biotechnology, agreed to buy Seminis Inc.
      for $1 billion in order to expand its sights to
      vegetables and fruit.

      The cost of the acquisition, which also calls for the
      assumption of an additional $400 million in debt,
      startled some investors. That's because, by some
      measures, the closely held Oxnard, Calif., company was
      valued at slightly more than $300 million in 2003,
      when a mountain of debt forced Seminis to go private.

      In New York Stock Exchange composite trading yesterday
      at 4 p.m., Monsanto traded at $54.10, off $3.62, or

      Monsanto executives yesterday defended the cost of the
      deal, its biggest since the late 1990s, arguing that
      while Seminis brings little in the way of
      biotechnology skills, it opens up new growth
      opportunities. Seminis, which has developed crops such
      as the baby carrot and the personal-size
      watermelon through conventional breeding, controls
      roughly one-third of the seed used to grow the fruits
      and vegetables found in most U.S. supermarkets.

      Cobbled together in the 1990s by Alfonso Romo Garza, a
      Mexican entrepreneur and Olympic horseman who hoped to
      become as dominant marketing vegetable seeds as
      Monsanto was with seeds for larger-scale crops,
      Seminis controls 23% of the world's tomato-seed
      market, 34% of the hot pepper-seed market and
      38% of the cucumber-seed market.

      Executives at Monsanto, St. Louis, are playing down
      their interest in genetically modifying these sorts of
      crops anytime soon. Although U.S. consumers have
      largely accepted the presence in their groceries of
      genetically modified ingredients made from soybeans
      and corn, opinion research suggests that more shoppers
      would be leery if confronted with something they eat

      Still, Monsanto executives made clear that they hope
      to genetically modify vegetables and fruit in the
      future, if the market conditions are right. Seminis
      "makes a great platform," said Brett Begemann, the
      Monsanto executive vice president who will oversee the
      acquired company.

      The planned acquisition, which allows Monsanto to
      leapfrog DuPont Co. as the world's biggest marketer of
      conventional and genetically modified seed,
      is a new direction for Hugh Grant, who returned the
      company to popularity on Wall Street since becoming
      Monsanto's chief executive officer in May 2003 by
      cutting costs and narrowing its focus to a handful of
      crops. The wheat business was jettisoned, for example.
      Monsanto's stock price has roughly doubled during Mr.
      Grant's tenure.

      After years of cost cutting and retrenchment, Monsanto
      is eager to find new places to sell seed. Monsanto
      already saturates much of the American
      grain belt. Although the European Union is lifting its
      de-facto moratorium on genetically modified crops, the
      business of selling biotech seeds there
      will be negligible for the foreseeable future.

      Monsanto executives figure they can speed development
      of new vegetable varieties by Seminis by giving it
      access to technology such as molecular markers, which
      help plant breeders track desirable traits. Seminis,
      the world's biggest produce-seed firm, generated a net
      loss of $16.3 million on sales of $525.8 million in
      the fiscal year ended Sept. 30.


      Monsanto to buy seed company Seminis in $1B deal

      ST. LOUIS (AP) - Agricultural biotechnology giant
      Monsanto (MON) said Monday it will buy vegetable and
      fruit seed company Seminis for roughly $1B in
      cash, broadening its portfolio of seeds and tapping
      into the trend of healthier diets.

      Monsanto said it will assume an additional $400
      million in debt by Seminis, the supplier of more than
      3,500 seed varieties to commercial fruit and
      vegetable growers, dealers, distributors and
      wholesalers in more than 150 countries.

      Monsanto - already staking more of its future on seeds
      that include genetically modified ones able to
      withstand weeds, insects and disease - said it also
      would make a performance-based payment of up to $125
      million by the end of fiscal 2007.

      "The addition of Seminis will be an excellent fit for
      our company as global production of vegetables and
      fruits, and the trend toward healthier diets, has been
      growing steadily over the past several years," said
      Hugh Grant, Monsanto's chairman, president and chief

      Grant called 10-year-old Seminis, with sales of $526
      million in its 2004 fiscal year, "uniquely positioned
      to capitalize on this fast-growing segment of
      agriculture and the acquisition likewise expands
      Monsanto's ability to grow."

      Citing the pending acquisition, Monsanto pared its
      estimate for fiscal 2005 earnings to 86 cents to $1.06
      a share, down from a previous range of $1.56
      to $1.71. Analysts surveyed by Thomson First Call
      were expecting Monsanto's earnings of $2.05 a share.

      Pending regulatory approvals, Monsanto expects the
      deal to close sometime between March and May. The
      company said the deal should be accretive to
      earnings per share, cash flow and revenue growth in
      fiscal year 2006, its first full year of operation.

      The move comes two months after Monsanto's newly
      formed holding company American Seeds acquired the
      seed company Channel Bio for $120 million cash.
      Monsanto formed American Seeds to support regional
      seed businesses with capital, genetics and technology

      Seminis will be a wholly owned Monsanto subsidiary,
      headed by its existing president and CEO.

      Monsanto said it expects to continue Seminis' focus on
      developing products using advanced breeding
      techniques, with biotech applications an option
      well down the road.

      That push comes as biotech crops are flourishing in
      the United States and taking root overseas, accounting
      for several tens of billions of dollars in
      crops in five leading countries, despite European
      resistance to the technology.

      Alfonso Romo, chairman and chief executive of Seminis,
      said "we are bringing a complementary technology base
      and specialized expertise that can not only support
      economic growth for farmers, but contribute to the
      health and nutrition of consumers on a global scale."


      January 25, 2005
      Monsanto Buying Leader in Fruit and Vegetable Seeds
      The New York Times

      In at least a temporary diversification away from
      genetically modified crops, Monsanto, the agribusiness
      company, agreed yesterday to pay
      about $1 billion to acquire Seminis, the world's
      largest producer of fruit and vegetable seeds.

      Until now, Monsanto has focused on corn, soybeans and
      cotton seeds, and on using genetic engineering to
      produce crops that are resistant to herbicides
      and insects. (Their seeds often need to be sprayed
      with Round-up in order to germinate, and are sterile,
      thereby not allwoing the farmer to save their own
      seed. Laura)

      But executives said yesterday that Monsanto would
      develop new vegetable varieties using conventional
      breeding. They said the fruit and vegetable
      seed business could grow without biotechnology, based
      on a consumer movement toward healthier diets.

      "It's fine to dream, but you have to decide what
      you're going to do tomorrow morning," Monsanto's chief
      executive, Hugh Grant, said about biotech
      fruits and vegetables during a conference call with
      analysts. "In the long term, there may be
      opportunities in biotech."

      Some genetically engineered papaya and squash are on
      the market. The first biotech crop to be
      commercialized was the Flavr Savr tomato, developed
      by a biotechnology start-up that Monsanto acquired.
      But that tomato did not catch on.

      Now industry executives say it is difficult to bring
      new biotech fruits and vegetables to market because of
      consumer resistance. Also, fruits and vegetables are
      small crops, making it difficult to recoup development
      and regulatory costs. A few years ago, Monsanto
      decided to focus its biotech efforts on major crops.

      The acquisition comes as Monsanto has been shifting
      its business from agricultural chemicals to seeds and
      biotechnology. Over the last decade, it has
      aggressively acquired seed companies, mainly in the
      corn and soy business, igniting some concerns that the
      markets were becoming too concentrated.

      The new acquisition not only makes Monsanto the
      largest supplier of vegetable seeds in the world, but
      also, according to the company's calculations, the
      largest seed and biotech company over all. It would
      surpass DuPont, which owns the corn seed giant Pioneer
      Hi-Bred, in terms of revenues derived from seeds and
      biotech traits.

      Seminis, based in Oxnard, Calif., had sales last year
      of $526 million, with its leading products being
      tomato, cucumber, beans and pepper seeds. Its
      main brands are Seminis, Asgrow, Petoseed and Royal
      Sluis and it sells mainly to farmers, not gardeners.
      But, with partners, it has recently started to develop
      some consumer items, like the Bambino miniature
      watermelon and Lettuce Jammers, lettuce in the shape
      of a taco shell.

      Its main rivals in fruit and vegetable seeds are
      Syngenta of Switzerland and Limagrain of France. Less
      than 1 percent of Seminis's sales come from
      genetically modified seeds.

      Under the deal, Monsanto will pay about $1 billion in
      cash and assume $400 million in debt. It might also
      pay an additional sum of up to $125 million by the end
      of fiscal year 2007 based on the performance of

      Seminis was started in 1994 by a Mexican entrepreneur,
      Alfonso Romo Garza, who decided to create a giant
      vegetable seed company by acquiring
      smaller ones. The company went public in 1999 at $15 a
      share, though Savia, a Mexican company affiliated with
      Mr. Romo, retained majority ownership.

      But the company suffered severe losses and in 2003,
      majority control was acquired for $3.78 a share by Fox
      Paine & Company, a buyout firm.

      Fox Paine, based in Foster City, Calif., paid $163
      million for what is now a 58 percent stake in Seminis.
      New management helped spur growth and
      restore profits before special charges. Based on the
      $1 billion Monsanto is paying, Fox Paine will get
      about $580 million, the president and co-founder,
      Dexter Paine, said.

      Shares of Monsanto, which have nearly doubled in the
      last year, fell $3.62, or 6 percent, yesterday to
      $54.10, as investors seemed to be surprised by the
      size and price of the deal.

      "I think the market was expecting strategic
      acquisitions of the bolt-on variety," like small
      corn-seed companies, said Kevin McCarthy, analyst at
      Banc of America Securities. "This deal is clearly in a
      different league."

      Frank Mitsch, analyst at Fulcrum Global Partners,
      pointing to how much the price of Seminis has risen
      since Fox Paine bought it in 2003, said, "It does
      make one step back and wonder as to why this
      transaction didn't occur 18 months ago."

      Monsanto has said that sales of its genetically
      modified soy, corn and cotton continue to grow, but
      that it has had trouble expanding genetic
      engineering to other crops.

      It dropped an effort to introduce genetically modified
      wheat last year after some American farmers said such
      an introduction might hurt exports. And
      its genetically modified grass for golf courses has
      run into opposition from environmental groups.

      With fruits and vegetables, it said, it will analyze
      genes in the crops to speed conventional breeding of
      improved varieties but would refrain for now from
      putting new genes into the crops.

      (I have a copy of "The Future Of Food" which exposes
      the GM that I am willing to rent out for $2.00 and

      Peace, Good Health and Joyful Love

      test'; " type=text/css>

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    • tev treowlufu
      It is even worse than that... http://rense.com/general62/seeds.htm ... ===== [...there ll be love and laughter, and peace ever after, just you wait and see...
      Message 2 of 3 , Feb 1, 2005
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        It is even worse than that...


        --- Laura Haddaway <iamdunroamin@...> wrote:

        > Important to all us raw and/organic fooders, who
        > needs
        > the genes of animals put in our fruits and veggies?

        > In a move that opens the door to the aggressive
        > marketing of biotech fruits and vegetables, Monsanto
        > has agreed to purchase Seminis, the world's
        > largest producer of fruit and vegetable seeds, for
        > about $1 billion.

        [...there'll be love and laughter,
        and peace ever after,
        just you wait and see...
        ---Vera Lynn]

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      • John de la Garza
        maybe this will help the organic food market
        Message 3 of 3 , Feb 2, 2005
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          maybe this will help the organic food market

          On Feb 1, 2005, at 2:00 PM, tev treowlufu wrote:

          > It is even worse than that...
          > http://rense.com/general62/seeds.htm
          > --- Laura Haddaway <iamdunroamin@...> wrote:
          >> Important to all us raw and/organic fooders, who
          >> needs
          >> the genes of animals put in our fruits and veggies?
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