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Monsanto Buys Regional Seed Company

ST. LOUIS (March 3, 2005) - Monsanto Company (NYSE: MON) said Tuesday its fledgling holding company will buy seed-marketer NC+ Hybrids Inc. for $40 million in cash, continuing the agribusiness' shopping spree for regional seed companies as its dominance in herbicides erodes.

St. Louis-based Monsanto said NC+ Hybrids Inc., based in Lincoln, Neb., is the latest acquisition by its American Seeds Inc. unit, formed last year to support regional seed businesses with capital, genetics and technology investments.

NC+ Hybrids recently was formed through a reorganization of NC+ Hybrids Cooperative, established nearly a half century ago as armer-owned cooperative. The company represents roughly 1 percent of the U.S. corn seed market.

"ASI was established with the intention of cultivating a new business model that brings new technology more directly to more farmers through local seed brands," said Kerry Preete, Monsanto's vice president of U.S. crop production. NC+ Hybrids "is the logical continuation of our strategy to add regional seed companies that can build this new model and accelerate ASI's growth."

The purchase is the latest by Monsanto, which last month announced it was buying Emergent Genetics Inc. - the nation's third-largest cotton seed company - for $300 million.

Boulder, Colo.-based Emergent has roughly 12 percent of the U.S. cotton seed market through its Stoneville and NexGen brands. Emergent also has two cotton seed brands in India and a solid presence in several other smaller cotton-growing markets.

That announcement came less than a month after Monsanto agreed to a $1 billion cash deal to buy Seminis Inc., the Oxnard, Calif.-based supplier of more than 3,500 seed varieties to commercial fruit and vegetable growers, dealers, distributors and wholesalers in more than 150 countries.

With Emergent and Seminis, Monsanto said it will have a broader germplasm and traits platform, accelerating Monsanto's earnings growth this year by complementing its biotech corn and soybeans business.

With competition continuing to chip away at Monsanto's dominance in herbicides, the maker of Roundup has increasingly focused on seeds - including genetically modified offerings able to withstand weeds, insects and disease seeds - for future profits. Monsanto already makes the DeKalb and Asgrow brands of seeds.

Late last year, Monsanto's American Seeds Inc. acquired Indiana-based seed company Channel Bio Corp. for $120 million cash.

Monsanto shares rose 42 cents, or 0.7 percent, to $59.20 in trading Tuesday morning on the New York Stock Exchange - at the high end of its 52-week trading range of $31.36 to $59.64.