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nafex - Re: [NAFEX] Monsanto Buy Seminis Seeds

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  • From: Heron Breen <breen@fedcoseeds.com>
  • To: North American Fruit Explorers <nafex@lists.ibiblio.org>
  • Subject: Re: [NAFEX] Monsanto Buy Seminis Seeds
  • Date: Tue, 25 Jan 2005 07:54:07 -0600

HI all,
Yes, Seminis supplies probably 30% of the wholesale seed farm and garden
market.
Many many smaller companies buy bulk from Seminis and repackage the seed for
retail. If a person wisely chooses boycotting Monsanto and Seminis, it may be
a
needed wake up call to small companies like the one I work for, but would also
seriously restrict diversity among varieties offered in the trade.
Leave it to big business to make all these wise choices in the name of giving
"value" to the consumer. Say Buy Buy to your illusions!
Heron Breen
zone 4

On Mon Jan 24 16:44 , 'Patti ' <mtpander@comcast.net> sent:

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>On another list I read that Seminis provides seeds for Burpee, Territorial
>and
Johnny's. Does anyone know if that's true and what other seed companies they
sell to. Sounds like a boycott is in order.
>
>Patti
>
>-------Original Message-------
>
>
>From: Doreen Howard
>Date: 01/24/05 13:54:48
>To: gardenwriters-on-gardening; North American Fruit Explorers
>Cc: Cheryl Long
>Subject: [NAFEX] Monsanto Buy Seminis Seeds
>
>KANSAS CITY, Mo. (Reuters) - Agriculture products company Monsanto Co. (MON)
>on Monday said it will buy Seminis Inc., the world's largest commercial
>fruit and vegetable seed company, for at least $1 billion from a private
>equity firm to capitalize on the trend toward healthier eating.
>
>Monsanto, whose shares fell nearly 7 percent, will also assume about $400
>million in debt and will make a payment of up to $125 million by the end of
>fiscal 2007, based on financial targets.
>
>Monsanto, a leading developer of genetic modifications for crops like
>soybeans and corn, said biotechnology modifications to Seminis' fruit and
>vegetable lines were an option, but the initial focus would be on leveraging
>Seminis' conventional breeding programs with Monsanto's advanced research
>and development to develop improved product options.
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>"In the near- to mid-term this is going to be about breeding," Monsanto
>Chairman Hugh Grant told analysts and reporters on a conference call. "In
>the long term, there may be an opportunity in biotechnology."
>
>Seminis has only one biotech seed on the market now, a virus-resistant
>squash introduced four years ago.
>
>Grant said the vegetable seed market is enjoying solid growth, thanks in
>part to healthier eating habits, and that Monsanto wants to capitalize on
>that.
>
>Seminis supplies more than 3,500 seed varieties to commercial fruit and
>vegetable growers, dealers, distributors and wholesalers around the world.
>
>The 10-year-old Oxnard, California-based company's top sellers include
>tomatoes, cucumbers and beans, and its seeds are sold in more than 150
>countries around the world.
>
>The company is considered the largest fruit and vegetable seed company in
>the world, with annual sales of $526 million in fiscal 2004. On a net basis,
>it lost $16.3 million in fiscal 2004, improved from a loss of $31.7 million
>in fiscal 2003, according to regulatory filings.
>
>The company currently is privately held, with majority ownership held by
>funds managed by private equity firm Fox Paine & Company LLC, of San
>Francisco. Fox Paine bought control of Seminis from Mexican conglomerate
>Savia (SAVIAA) in a deal announced in December 2002, for about $650 million
>in cash and debt.
>
>Seminis will operate as a wholly owned subsidiary of Monsanto.
>
>The deal comes as Monsanto is shifting its focus from the highly competitive
>herbicide chemical business to the seed industry, where it has seen strong
>growth recently.
>
>Monsanto already controls an estimated 14 percent of the U.S. corn seed
>market and through licensing arrangements provides germplasm and technology
>traits that extend its influence into about one-third of the U.S. market.
>
>The deal is expected to close in Monsanto's 2005 fiscal third quarter, which
>ends in May, and boost earnings in fiscal 2006, the company said.
>
>Monsanto said the deal should not change its 2005 earnings forecast of $1.85
>to $2.00 a share on an operating basis, but it revised its projected net
>earnings for the year to a range of 86 cents to $1.06 a share, from a
>previous forecast of $1.56 to $1.71.
>
>Chief Financial Officer Terry Crews said Monsanto was slightly adjusting
>downward its projected return on capital for 2005 and 2006. But the
>combination should boost Monsanto's compounded annual growth in gross profit
>to 7 percent from 4 percent.
>
>"Seminis allows us to leverage our leadership ... to almost immediately
>create additional growth for Monsanto," said Crews.
>
>Analysts said Seminis was a good strategic fit, though they questioned the
>high price, which is about double the valuation the company brought two
>years ago.
>
>Monsanto shares were down $4.01 at $53.71 in late afternoon trading on the
>New York Stock Exchange.
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