At more than two times last year's sales of $75 million, that's a pretty good price for Monsanto to get. But the cost savings from synergies might be worth it to Syngenta, which sold about $200 million worth of sunflower seeds last year. The move also considerably strengthens Syngenta's global lead in the sunflower market, should another seed producer like Dow Chemical
The deal likely includes some technology for next-generation sunflowers, which might help grow future sales and make the acquisition look less costly. Little Leaguers probably shouldn't hold out hope for bubble-gum-flavored seeds, though; most of the market for sunflowers is for the oil in the seeds. Producing hybrids with increased oil content or higher yields means Syngenta can charge farmers more for the seeds.
The move continues Monsanto's push to be a more focused company by selling off products on the fringe. Last year, the agriculture giant sold its Posilac cow hormone to its marketing partner, the animal health division of Eli Lilly
Staying focused on corn, soybeans, cotton, vegetables, and now wheat is a good move for Monsanto. It needs to push out innovations in those larger markets to make up for the sinking ship that Roundup has become. Despite their looks, sunflowers just didn't have a bright enough future.
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