Monsanto Canada Inc. has acquired a majority ownership in Guelph-based First Line Seeds Ltd. The agreement mainly affects the soybean seed market.
The companies said in a news release this week that the partnership will give Canadian farmers access to Monsanto’s biotechnology research and products.
First Line will have a direct relationship with Asgrow Seed Co., wholly owned by Monsanto, and a leading soybean breeder, developer and distributor in the United States.
“We will be working closely with our colleagues at Asgrow to conduct joint research and development and marketing efforts,” said Peter Hannam, president of First Line Seeds. “Practically speaking, this relationship will start at the research level with the sharing of quality germplasm and will also include licencing agreements that will allow both companies to market and distribute varieties developed by one another.”
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Hannam said First Line expects to launch its Roundup Ready varieties into the Canadian market during the 1998 season.
Meanwhile, market watchers in Britain said last week that Monsanto is a leading contender to buy the seed unit of Anglo-Dutch food and consumer products group Unilever Plc.
Unilever put the business up for sale last month. Dupont and Novartis are also expected to be bidders.
Drug giant buys Monsanto
MADISON, N.J. (Reuters) – Drug giant American Products Corp.. agreed June 1 to buy Monsanto Co. for $33 billion (U.S.) in stock, creating a company with products ranging from over-the-counter drugs to genetically engineered seeds.
In what the companies called a merger of equals, AHP agreed to buy Monsanto by exchanging 1.15 of its shares for each share of Monsanto.
The two companies said they were combining in a deal that would create a company with a market capitalization of more than $96 billion, with 1998 sales totaling $23 billion from products ranging from life sciences to agriculture, pharmaceuticals and household goods.
Several traders speculated that a rival bid for Monsanto might emerge, noting recent rumors that Dupont Co. and Pfizer Inc. might be interested in an acquisition.
After the deal, Monsanto’s shareholders will own about 35 percent of the new company.
It will have a 22-member board of directors, with representation equally divided between American Home Products and Monsanto.
Monsanto chief executive officer Robert Shapiro and American Home Products chief executive officer John Stafford will be co-chairs and co-CEOs and will head an office of the chairmen.
Within three years of the closing of the merger, the companies expect annual cost savings of $1.25 billion to $1.5 billion, they said. Assuming the merger is completed by the end of 1998, earnings per share are anticipated to be diluted by up to 15 percent in the first year after the deal, and by a lesser amount in 2000. Thereafter, earnings will increase, they said.
The transaction is subject to approval by both companies’ shareholders, normal governmental reviews and other customary conditions.
