Monsanto announced in mid-November an unusual venture for the company. It formed a new holding company called American Seeds Inc. (ASI) that is designed to support regional seed companies with capital, genetics and technology investments.
At the same time, Monsanto announced that the new ASI had just acquired Channel Bio Corporation, a seed company based in Kentland, IN. Channel includes the seed brands of Crow's Hybrid Corn, Midwest Seed Genetics, and Wilson Seeds. Combined, the three brands hold 2% of the U.S. corn seed market and Monsanto holds 14% with its DeKalb and Asgrow brands, according to Monsanto. ASI purchased Channel with a cash transaction of $120 million.
Kerry Preete, Monsanto's vice president of U.S. crop production, reports that Monsanto developed the holding company concept after talking to seed-licensing customers that need access to capital and technology. ASI is now set up to invest in other seed businesses. “We will keep an eye open for other businesses to see if they fit the model,” Preete says.
Don Funk, president of Channel Bio, states that the company looks forward to its new relationship with Monsanto because it locks Channel into a strong position in genomics-based breeding. Channel also will have access to Monsanto's strong capital base. “We like to believe we're a company of vision,” Funk states. “We think ASI will help us go to the forefront of the seed industry in North America.”
The formation of ASI will not take away from Monsanto's other substantial seed businesses, Preete adds. The company fully intends to continue marketing seed through its DeKalb and Asgrow brands and to continue developing and licensing new traits to other seed partners.