These days making a deal with cash in your pockets is so much easier than borrowing to finance. Case in point, agribusiness Monsanto Co. Only six days ago, Monsanto said that it would have to raise earnings expectations for the third time this year and had enough extra cash to pursue deals in the near future. The future is now for Monsanto as it acquired Netherlands' De Ruiter Seeds Group BV on Monday for $863 million in cash.
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The acquisition adds to Monsanto's growth in the protected-culture segment, where seeds are germinated in controlled settings like greenhouses. The deal demonstrates how some companies in the food and agricultural industry such as Monsanto have been able to fatten their wallets during these slow economic times. While profits have risen, Monsanto [MON] stock has ballooned to $110 per share, doubling over the last year, as investors flock to the St. Louis-based company as a recession-proof safety net.
Don't expect Monsanto to rest on its laurels; this deal may just be the tip of the iceberg, as it said last week that it is interested in making deals. The company's recent growth has been partially propelled by the acquisition of Brazilian corn seed company Agroeste Sementes S/A for just over $100 million, as well as the acquisition of cottonseed giant Delta & Pine Land Co. for $1.5 billion. - Gerald Magpily
See story about De Ruiter from TheDeal.com
See story from The Wall Street Journal
See story from Bloomberg
See TheDeal.com: Monsanto sprouts despite lifeless market
