Jan. 5 (Reuters) – U.S. seed and agrochemical company Monsanto Co, which is in the process of being bought by Germany’s Bayer AG for US66 billion, swung to a quarterly profit, helped by higher demand from South America.
Sales of soybean seeds and traits jumped 37 percent as more farmers in South America sowed the company’s genetically modified soybean seed Intacta RR2 Pro.
Monsanto agreed in September to a sweetened $128-per-share offer from Bayer that, if approved by regulators, would create a company commanding more than a quarter of the world market for seeds and pesticides.
Monsanto, known for its genetically engineered crops and Roundup herbicide, did not offer any update on regulatory approvals or potential divestitures related to the Bayer deal.
Bayer and Monsanto have said they are confident that the deal will pass regulatory scrutiny. Bayer has said it is committed to divest up to $1.6 billion of its portfolio to win approval.
Increased research and development spending by the combined companies and plans to develop a global seed breeding and biotechnology hub in St. Louis fuel hopes that regulators will not block the deal, Monsanto chief Hugh Grant had said in December.
Uncertainty about whether President-elect Donald Trump would stand in the way of large mergers after taking office this month – or whether the regulatory approval process under the new administration could take longer than expected – has clouded the outlook of some deals.
Some farm groups, seed companies and bipartisan lawmakers have also raised concerns about the Monsanto-Bayer deal, saying it could result in higher prices and reduced choices for farmers.
Net profit attributable to Monsanto was $29 million, or seven cents per share, in the first quarter ended Nov. 30, compared with a loss of $253 million, or 56 cents per share, a year earlier.
Excluding items, the company earned 21 cents per share. Net sales rose more than 19 percent to $2.65 billion.