Monsanto expands into fruits and vegetables
- 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
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
PO Box 55699
Seattle, WA 98155
Web Site: http://www.thecampaign.org
Monsanto Co. to Pay $1 Billion For Produce-Seed Firm
By SCOTT KILMAN
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
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.
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
By ANDREW POLLACK
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
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
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
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>
Do you Yahoo!?
Yahoo! Mail - Easier than ever with enhanced search. Learn more.
- It is even worse than that...
--- Laura Haddaway <iamdunroamin@...> wrote:
> Important to all us raw and/organic fooders, who=====
> 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...
Do you Yahoo!?
Yahoo! Mail - Easier than ever with enhanced search. Learn more.
- 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...
> --- Laura Haddaway <iamdunroamin@...> wrote:
>> Important to all us raw and/organic fooders, who
>> the genes of animals put in our fruits and veggies?