ST. LOUIS -- In a deal between two of the country's major agricultural biotechnology firms, Monsanto Co. here has signed a letter of intent to contribute $30 million to Davis, Calif.-based Calgene in exchange for 49.9% of Calgene's stock.
plant oils research and development," according to the letter of intent.
The deal is expected to close in the fourth quarter of this year, pending approval by Calgene stockholders.
Monsanto is including a $10 million cash advance, in exchange for a convertible note, to Calgene, maker of the Flavr Savr tomato, America's first genetically altered food.
"Calgene and Monsanto have both been pioneers in the development of plant biotechnology products," said Roger Salquist, chairman and chief executive officer of Calgene. "The combination of our respective businesses and proprietary technology assets in fresh produce and specialty plant oils will create a leading food and agribusiness enterprise."
Since the Flavr Savr tomato hit the market last year, Calgene has struggled with distribution and supply. The marketing knowhow of Gargiulo, one of the country's major tomato shippers and packers, is expected to help, according to a Monsanto official.
"Gargiulo's leadership in fresh produce growing and shipping will further enhance delivery of high quality products to consumers," said Hendrik Verfaillie, vice president of Monsanto.
