November 3, 2008 / 3:12 PM / 10 years ago

Monsanto to acquire Brazil's Aly for $290 mln

NEW YORK (Reuters) - Monsanto Co MON.N said on Monday it has agreed to acquire Brazil-based Aly Participacoes Ltda for $290 million, the move will broaden the agricultural biotech company’s presence into sugarcane breeding.

Monsanto’s acquisition of Aly Participacoes from Votorantim Novos Negocios Ltda and its sister company, Votorantim Industrial S.A., will be consummated with existing excess cash and will close as soon as is practical, Monsanto said in a statement.

“Our goal with this approach is to increase yields in sugarcane while reducing the amount of resources needed for this crop’s cultivation, just as we’re doing now for corn, soybeans and cotton,” said Carl Casale, Monsanto’s head of global strategy and operations.

St. Louis-based Monsanto, which makes crop protection chemicals and biotech seeds, already has a market-leading presence in many corn, cotton and soybean seed markets worldwide.

The company is also expanding its presence in the vegetable seed market and earlier this year, it agreed to acquire Netherlands-based De Ruiter Seeds for $860 million. Monsanto already owns Seminis, which controls a large share of the North American vegetable seed market.

Aly Participacoes operates sugarcane breeding and technology companies, CanaVialis S.A. and Alellyx S.A., both based in Brazil.

CanaVialis is the world’s largest private sugarcane breeding company, while Alellyx is focused on developing biotech traits primarily for sugarcane.

Brazil is the world’s largest producer of sugarcane and the largest exporter of finished sugar. The crop is also widely used in Brazil to produce ethanol.

However, Monsanto does not expect the deal to add to its earnings until the middle of the next decade. It also expects to book a purchase-accounting adjustment for in-process research and development.

In 2007, Monsanto had already established a licensing and trait-collaboration agreement with CanaVialis and Alellyx to develop and commercialize certain technologies for sugarcane growers in Brazil.

Monsanto said it plans to retain the roughly 250 employees at the two companies and focus on development of the businesses.

Monsanto’s shares, which peaked at $145.80 in June, have been hurt amid the wider commodity sell-off over the last few months. In early New York Stock Exchange trading on Monday they rose 23 cents to $89.21 on the New York Stock Exchange.

Editing by Maureen Bavdek

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