Monsanto acquires Brazilian sugarcane companies

By Ryan C. Christiansen | November 03, 2008
Web exclusive posted Nov. 7, 2008 at 10:09 a.m. CST

Monsanto Co. has announced that it's acquiring two Brazilian sugarcane breeding and technology companies for $290 million. Monsanto will acquire Aly Participacoes Ltda., which operates the sugarcane agricultural companies, CanaVialis S.A. and Alellyx S.A.

According to Carl Casale, executive vice president of global strategy and operations for Monsanto, the company recognizes that global demand for sugar to produce ethanol is rising faster than current production levels from sugarcane. He said the acquisition supplements the company's ongoing commitment to corn as an ethanol feedstock.

CanaVialis is the world's largest private sugarcane breeding company and is developing and commercializing a proprietary sugarcane germplasm that Monsanto anticipates will bring significantly higher yields to sugarcane over publicly available varieties. CanaVialis has contracts with 46 sugarcane mills, whose production area covers 2.7 million acres, approximately 15 percent of the planted sugarcane market share. Alellyx is an applied genomics company that is focused on developing biotech traits primarily for sugarcane. Monsanto expects to bring the new sugarcane varieties to market by 2016, Casale said.

Monsanto will acquire Aly Participacoes from Votorantim Novos Negocios Ltda. and its sister company, Votorantim Industrial S.A., both of which are part of the Brazilian industrial conglomerate, Votorantim Participacoes S.A., commonly referred to as the Votorantim Group.