Monsanto to buy Aly Participacoes for $290 million
Triangle Business Journal
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Monsanto Co. said Monday it’s buying Aly Participacoes for $290 million to invest in sugarcane to feed global demand for raw sugar and biofuels.
Aly Participacoes operates the sugarcane breeding and technology companies, CanaVialis S.A., the world's largest private sugarcane breeding company, and Alellyx S.A., an applied genomics company that is focused on developing biotech traits primarily for sugarcane. Both are based in Brazil, the world’s largest producer of sugar and the world's second-largest producer of ethanol, after the United States.
Monsanto intends to retain the leadership and the 250 employees at the two companies.
Monsanto's acquisition of Aly Participacoes from Votorantim Novos Negocios and its sister company, Votorantim Industrial S.A., will be consummated with existing excess cash. Both Votorantim Novos Negocios and Votorantim Industrial are part of the Brazilian industrial conglomerate, Votorantim Participacoes S.A. commonly referred to as the Votorantim Group. The transaction will be completed as soon as practical.
Monsanto said it does not expect the acquisition to be accretive to earnings until the middle of the next decade.
"Global demands for raw sugar and biofuels are beginning to rise at a faster pace than the current production levels in sugarcane, a crop that is essential to meeting these demands," said Carl Casale, executive vice president of global strategy and operations for Monsanto, in a statement. "Similar to our work with technology collaborators, we expect the additions of CanaVialis and Alellyx will allow us to combine our breeding expertise with key large-acre crops with their breeding expertise in sugarcane.”
The pending acquisitions of CanaVialis and Alellyx represent the third major investment Monsanto has made in Brazil over the past year. In 2007, Monsanto acquired Agroeste, a Brazilian corn seed company, and announced $60 million in investments to expand its seeds research and production.
Creve Coeur, Mo.-based Monsanto Co. (NYSE: MON) develops insect- and herbicide-resistant crops and other agricultural products. The company, part of a strong crop-protecution cluster in the Raleigh-Durham area that also includes Bayer CropScience, operates a facility in Research Triangle Park.
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