Goldman, Sachs & Co. J.P. Morgan & Co. Bear, Stearns & Co. Inc
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35,000,000 Shares Common Stock This is an initial public offering of shares of common stock of Monsanto Company. All of the shares of common stock are being sold by Monsanto. Prior to this offering, there has been no public market for the common stock. The common stock has been approved for listing, subject to official notice of issuance, on the New York Stock Exchange under the symbol ‘‘MON.’’ See ‘‘Risk Factors’’ beginning on page 10 to read about factors you should consider before buying shares of the common stock. Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. Per Share Total Initial public offering price ....................................... $20.00 $700,000,000 Underwriting discount .......................................... $ 1.00 $ 35,000,000 Proceeds to Monsanto ......................................... $19.00 $665,000,000 To the extent that the underwriters sell more than 35,000,000 shares of common stock, the underwriters have the option to purchase up to an additional 5,250,000 shares from Monsanto at the initial public offering price less the underwriting discount. The underwriters expect to deliver the shares in New York, New York on October 23, 2000. Goldman, Sachs & Co. Salomon Smith Barney J.P. Morgan & Co. Morgan Stanley Dean Witter Bear, Stearns & Co. Inc. Merrill Lynch & Co. Prospectus dated October 17, 2000. 39019 Monsanto IFC IBC 10/17/2000 4:09 PM Page 2 Monsanto is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this document. This summary does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, especially the risks of investing in our common stock discussed under ‘‘Risk Factors.’’ In this prospectus, the terms ‘‘we,’’ ‘‘us,’’ ‘‘our’’ and ‘‘Monsanto’’ refer to both the issuer in this offering and our predecessor, the agricultural products business of the former Monsanto Company (we refer to the former Monsanto Company as ‘‘old Monsanto’’). In connection with the merger of old Monsanto and Pharmacia & Upjohn, Inc., old Monsanto changed its name from ‘‘Monsanto Company’’ to ‘‘Pharmacia Corporation.’’ The term ‘‘Pharmacia’’ refers to Pharmacia Corporation following the merger. Monsanto, our logo and other trademarks, trade names and service marks of Monsanto mentioned in this document, including Roundupா, Roundup Readyா, Roundup Ultraா, Roundup Dryா, Posilacா, Lassoா, Harnessா, Macheteா, Maverickா, Latitudeா, DEKALBா, Hybritechா, Holden’sா, YieldGardா, MaisGardா, Bollgardா, NewLeafா, Asgrowா, Hartzா, Avadexா and Enviro-Chemா are the property of, or are licensed by, Monsanto, Pharmacia or a subsidiary of Monsanto or Pharmacia. Our Company We are a leading global provider, based on sales, of technology-based solutions and agricultural products for growers and downstream customers, such as grain processors and consumers, in the agricultural markets. The combination of our herbicides, seeds and related genetic trait products provides growers with integrated solutions to more efficiently and cost effectively produce crops at higher yields, while controlling weeds, insects and diseases. Our base business, led by Roundup and coupled with the latest tools in biotechnology, genomics and molecular breeding, gives us a unique set of assets and capabilities. Our family of Roundup herbicides provides a strong foundation for our overall business. Over the past three decades, we have grown our Roundup herbicide into the world’s best-selling herbicide. While Roundup competes with numerous other herbicides sold by a variety of companies, its sales in 1999 were more than five times those of the next largest selling herbicide. Our sales volumes of Roundup and other glyphosate-based herbicides have grown at an average annual growth rate of approximately 20% over the last 10 years. In this same period, these products maintained an average sales growth rate of approximately 11%, even as we reduced prices significantly and our patents expired in countries outside the United States. Roundup’s success is based on its ability to provide growers with improved economic and environmental benefits, as well as our low-cost manufacturing position and formulations expertise. With respect to the crops on which we have chosen to focus, we hold leading positions by acreage in seeds, seed traits and genetic technologies that protect crops from insects and that provide effective weed control options. Our global seed infrastructure enables us to coordinate our agricultural chemicals and seeds and traits research to introduce new products more rapidly and efficiently to our customers. In 1999, we held the No. 1 or No. 2 seed market share position in key markets for corn and soybeans, as well as the No. 1 position in the European wheat market. Acreage planted with our seed traits grew from approximately 3 million in 1996 to approximately 86 million in 1999, accounting for over 70% of the worldwide acres planted with herbicide-tolerant and insect- resistant traits. We estimate that our acreage of biotechnology traits in the United States for 2000 increased by approximately 5%. Our trait products are available through an extensive network of seed companies which have licensed our technologies. We also have one of the largest efforts in the amount spent on conventional plant breeding for the crops on which we have chosen to focus. 3 Over the last several years, we have made a major change in our research and development to focus on gene-based capabilities. Our integrated efforts in this area are threefold. First, our genomics research and development helps us understand the structure and function of genes as well as how those genes are activated. Second, our molecular breeding effort combines our genomics capabilities and conventional breeding expertise to significantly speed up commercialization of new seeds with desired attributes, without genetically modifying plants. Finally, our biotechnology research and development focuses on genetically enhancing crops via incorporation of tailored genes to add specific benefits. We have integrated our products and technologies to provide customers with unique solutions. As a result, we believe we are well positioned to maintain our leadership positions and to take advantage of industry developments. Strategy Our goal is to create and deliver integrated agricultural solutions that substantially increase the volume and quality of global food production while reducing economic costs and environmental effects. We aim to achieve this by integrating our traditional agricultural products with advanced technological tools, including genomics, biotechnology and molecular breeding. Our strategy is built around the following focus areas: • Continuing to develop integrated solutions for growers. We are continuing to integrate our agricultural chemicals with our seed and technology products to offer agricultural solutions to growers that meet their production needs. • Maximizing the growth of the Roundup business. We aim to increase our sales and income from Roundup by: • Encouraging expanded adoption of conservation tillage techniques by growers worldwide. We estimate that conservation tillage is currently practiced on only approximately 200 million of the estimated approximately 740 million acres in developed countries on which this farming technique could potentially be practiced. Roundup is the herbicide of choice in most conservation tillage markets today, and we will work to expand our position in this key area. • Increasing sales of Roundup Ready crops, which tolerate Roundup herbicide for effective weed control. We expect additional weed control opportunities for Roundup with the introduction of Roundup Ready crops into new markets and with the development of new products with the Roundup Ready technology. • Introducing additional proprietary formulations of Roundup. • Selectively reducing prices to encourage increased usage of Roundup. We have implemented a pricing strategy for Roundup in which we have selectively reduced prices to encourage increased use. Historically, our net sales of Roundup have increased as the growth in volumes has more than offset our price reductions. • Maintaining our position as a low-cost, high-quality producer of glyphosate, the active ingredient in Roundup. • Building on our relationships with our distribution partners. Our business is supported by a network of wholesalers, distributors and retailers that offer an array of 4 Monsanto products. We expect to continue to focus on and strengthen these relationships. • Accelerating the development and commercialization of new products. We expect to remain a leader in the development and introduction of new technologies for food and agricultural production by: • Reducing the time and cost of discovering new products. • Using genomics capabilities to speed invention and development of new technologies. We expect our genomics capabilities to reduce the time and cost of discovering new products by accelerating the identification of genes for crop improvement and by expanding the available pool of genes for new product development. • Expanding our technological expertise via strategic relationships.