Monsanto, the world’s largest biotech seed producer, on Monday signalled its intention to expand in Europe and increase its presence in the fast-growing greenhouse-seed market with a deal to buy De Ruiter Seeds Group of the Netherlands for €546m ($863.4m).
The US company’s presence in Europe took a hit last week when Romania joined six other European Union members in calling for a moratorium on planting MON810, a corn produced by Monsanto that is the only genetically modified crop approved for use in the bloc.
The US agribusiness has been benefiting from the boom in agricultural commodities. Monsanto recently raised its earnings per share guidance for fiscal 2008 from $2.70-$2.80 to $3.15-$3.25.
The company said its cash acquisition of De Ruiter would enable it to enhance its presence in the “protected-culture” business – which produces seeds for greenhouse or plastic-house agriculture – forecasting its vegetable seed division would bring in annual revenues of $1bn within five years.
The protected-culture seed sector – which racked up more than $600m in sales last year – is expected to rise by 8 to 10 per cent a year in the next five years. Driven by consumer demand for year-round fresh fruit and vegetables in North America and Europe, the sector is expected to be boosted by growing demand from shoppers in Asia.
De Ruiter Seeds is one of the world’s top vegetable seed breeding companies, with global sales of about €108m last year. It is an important producer of seeds for tomato, cucumber, melon and pepper crops.
Get alerts on Industrials when a new story is published