DealZone

Is Monsanto looking at spinning off a toxic asset?

June 24, 2009

Unveiling better-than-expected results this morning, Monsanto also may have planted seeds for a spin-off of its herbicides business. It said it was creating a separate division for its Roundup and other herbicides. At very least, it may look to put the business in some kind of trust to protect shareholders from getting zapped. CEO Hugh Grant (pictured below) sprinkled some hints about where the company is headed:

“Over the last six years, Monsanto’s business has undergone a dramatic transition from a company historically built on chemical innovations to one focused on delivering enhanced seed offerings that help farmers get more out of each acre of farmland while reducing the footprint of the inputs used on that land. The actions announced today will allow our company to better navigate in today’s changing business environment and keep the company on a clear path for growth.

“We believe these steps are in the best interests of our shareowners, our customers and our employees. This is designed to bring more clarity and predictability to our Roundup business and greater focus to our growing seeds and traits business.”

The business, once a boomer for Monsanto, is turning out to be nearly as noxious to the company as it is to weeds. Gross profit from Roundup is seen dropping by half to about $1 billion annually as the company grapples with increased competition.

It has been thorny on the PR side as well. In a recent suit, Monsanto accused DuPont of unlawfully using Roundup technologies in soybeans and corn. DuPont responded by accusing Monsanto of trying to deny access to alternative technologies at a time when farmers are struggling with weeds that are increasingly resistant to current Monsanto products.

Add to the mix Monsanto’s announcement this week of a new five-year venture with Dole Fresh Vegetables focused on preserving or restoring taste and color to fruits and vegetables, and you have a company that seems to be more focused on manipulating life than on engineering death. What is far less clear is whether the sale of Roundup will win over Monsanto’s greener critics. In “Food Inc,” a documentary currently in theaters, the company is cast as Darth Vader.

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In this month’s issue of Yes Magazine there is an excellent interview of Vandana Shiva, Director of the Research Foundation for Science, Technology and Natural Resource Policy in New Delhi, India. She speaks very eloquently about Monsanto’s “corporate agenda of total control” in developing countries via its system of biotechnological royalties on GMO seed supplies and the resulting bankrupting of small Indian farmers who foolishly adopt this unwise system of agriculture. Over 200,000 Indian farmers have committed suicide after being bankrupted by attempting Western high input agriculture – farmers whose ancestors have farmed sustainably on the same land for thousands of years. Monsanto is the very face of toxic modernity and its relentless poisoning of our living world, all in the name of profits and productivity. Thankfully, Wall Street has just given us all a closeup look at what happens when profits devoid of wisdom take control of our collective destiny. The developing world is probably beginning to re-think its misplaced trust in American business and Western models of economic development – the search for more sustainable models has begun in earnest. And not a moment too soon…

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