Monsanto disclosed today that its American Seeds, Inc., unit has added five more small companies in different communities in Illinois, Indiana, and Iowa. The overall price tag for the transaction was relatively small at about $77 million, and according to Monsanto, the five companies together control just 1.4% of U.S. corn seed sales and only 2% of U.S. soybean sales.
However, the latest acquisitions represent the fourth time since March 2005 that Monsanto has added local brands to American Seeds' portfolio. Through all of these deals, Monsanto spent a total of $178 million to pick up 13 brands and add control of 3.8% of U.S. corn seed sales and 2.4% of soybean sales.
Monsanto frames these deals as a way for it to provide its technologies to underserved geographies. The transactions are also a savvy "stealth" sales and marketing strategy from the company. The company acquires well-established and accepted local brands and continues to sell under these labels, while the underlying product becomes all Monsanto.
The timing of the deals looks propitious, especially with respect to the corn seed market. With everyone from the federal government to Ford
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.