U.S. seed and agrochemicals company Monsanto Co said on Thursday it is selling its U.S. sorghum production assets to Remington Holding Co LLC and will roll its sorghum breeding business into a joint venture with the privately held company, in transactions valued at about $169.5 million.
Monsanto’s global sorghum breeding business will be a part of the joint venture called Innovative Seed Solutions LLC, which will initially be focused on sorghum, a drought-tolerant grain crop that is used as animal feed and to produce ethanol biofuel. Remington will contribute cash to the venture.
The move comes in a period of heightened dealmaking in the agricultural seeds and chemicals industry. Monsanto last month rejected an unsolicited $62 billion takeover bid by Germany’s Bayer AG, but the companies have since met to try to negotiate a deal.
The sorghum transaction is Monsanto’s first spin-off of an entire crop space since the sale of its sunflower seeds unit to Syngenta in 2009, a Monsanto spokesman said.
It is unclear how the deal could impact any negotiations with Bayer. Monsanto declined to comment on how long it had been negotiating the sorghum deal with Remington.
A Remington subsidiary will take full ownership of Monsanto’s U.S. sorghum production facility in Dumas, Texas. Monsanto will assume a 40 percent stake in the joint venture, with Remington owning the remaining share.
“We recognize that our sorghum business has great potential to expand and grow both domestically and internationally,” Mike Frank, Monsanto’s chief commercial officer, said in a statement. “We believe by partnering with Remington in the joint venture, we can bring an increased level of focus, investment and resources into this crop space.”
Remington could not be immediately reached for comment.
Innovative Seed Solutions LLC will be governed by an operational board including senior executives from both companies, with Monsanto veteran Dan Zinck as its chief executive.
Monsanto will continue to sell sorghum seeds via its Asgrow, Dekalb and Channel seed brands and through regional seed dealer networks.
The company said it expects the deal to close after regulatory approval.
Monsanto shares were up about 0.9 percent on Thursday at $108.61 a share.
By Karl Plume
France has launched an offshore green hydrogen production platform at the country’s Port of Saint-Nazaire this week, along with its first offshore wind farm. The hydrogen plant, which its operators say is the world’s first facility of its type, coincides with the launch of another “first of its kind” facility in Sweden dedicated to storing hydrogen in an underground lined rock cavern (LRC).
The project sets up the Hydrogen Valley in Rome, the first industrial-scale technological hub for the development of the national supply chain for the production, transport, storage and use of hydrogen for the decarbonization of industrial processes and for sustainable mobility.
At first glance, hydrogen seems to be the perfect solution to our energy needs. It doesn’t produce any carbon dioxide when used. It can store energy for long periods of time. It doesn’t leave behind hazardous waste materials, like nuclear does. And it doesn’t require large swathes of land to be flooded, like hydroelectricity. Seems too good to be true. So…what’s the catch?