Monsanto Company to Acquire Emergent Genetics, Inc., a Leading Cotton Seed Compa

ST. LOUIS (Feb. 17, 2005) – Monsanto Company (NYSE: MON) announced today it signed a definitive agreement to acquire Emergent Genetics, Inc., for $300 million. Monsanto intends to finance the transaction with cash and commercial paper. In conjunction with the acquisition announcement, the company is also updating its fiscal year 2005 ongoing earnings-per-share (EPS) and free cash flow guidance.

The addition of the Emergent Genetics brands completes a strategic cotton germplasm and traits platform modeled on the company’s leading corn and soybean strategy, according to Hugh Grant, chairman, president and chief executive officer of Monsanto.

We have a strong base business built on seeds and traits, and the addition of Emergent is expected to give us a complementary cotton platform that, with the planned acquisition of Seminis, we believe will allow us to accelerate our growth,” said Grant. “This is our second major strategic acquisition recently and now we believe we have the elements we need to achieve our goals. Over the next year we’ll focus on three areas: execution of our business plans, assimilation of these new businesses, and replenishing our balance sheet.”

Through its Stoneville and NexGen brands, Emergent Genetics is the third largest cotton seed company in the United States, holding approximately 12 percent of the U.S. cotton seed market.

“Just as our DEKALB and Asgrow brands do in corn and soybeans, we believe the Stoneville and NexGen brands will provide a powerful showcase of our breeding advances and biotechnology traits in the U.S. cotton seed market,” said Grant. “Coupled with the germplasm development and licensing in our Cotton States business, our cotton business can mirror the successful model we’ve established through branded and licensed channels in corn and soybeans.”

Under the direction of Chief Executives Mark Wong and Sam Dryden, Emergent has established itself as a leading company in the cotton industry. In addition to the U.S. business, Emergent also has two leading cotton seed brands in India and a solid presence in several other smaller cotton-growing markets.

“We’re very proud of the Emergent business and the leadership position that our organization has been able to build in the U.S. and Indian cotton industry,” said Wong. “The addition of Emergent to Monsanto is a combination that will take Monsanto’s cotton business to the next level, helping the business grow while at the same time bringing new technology and products that will truly benefit the cotton industry.”

Building from Emergent’s strong business foundation, Monsanto will work to apply its biotechnology traits and molecular breeding capabilities to accelerate the speed at which new stacked-trait and second-generation products reach cotton producers, according to Grant.

“This combination will pair some of the terrific biotechnology and breeding advances happening at Monsanto with the backbone of proven cotton brands,” said Grant. “This will be a nice complement to our continued commitment to broadly license biotechnology traits, and the bottom line for cotton producers is we believe we’ll be able to move the most innovative technology into more stacked-trait products faster, while still ensuring broad choices in a competitive market.”

The acquisition is subject to regulatory approvals, and is expected to close as soon as practical. The deal does not include Emergent Vegetable A/S, which is based in Denmark.

Updated Fiscal Year 2005 Guidance
In conjunction with the acquisition announcement, Monsanto management also announced it is updating fiscal-year guidance for EPS on the strength of its seeds and traits business. Monsanto now expects EPS on an ongoing business basis to be toward the upper end of the $1.85 to $2.00 range outlined in its previous guidance. On an as-reported basis, the company adjusted expected EPS in the range of $0.71 to $0.93 based on the purchase accounting adjustment related to this transaction. (See reconciliation table with this news release.)

The company expects its planned acquisitions of Seminis, Inc., and Emergent to be accretive to EPS in fiscal year 2006. Monsanto also expects accelerated ongoing EPS growth of 15 percent from fiscal year 2005 to 2006 and an additional 15 percent from fiscal year 2006 to 2007. The company’s previous guidance projected a compounded annual growth rate of 10 percent in fiscal year 2006.

The company also adjusted its free cash flow guidance for fiscal year 2005. Based on the strong business performance, Monsanto now expects an increase of cash from operations, projected to be $1,200 million, compared with $1,050 million in the company’s previous guidance. Including free cash to be used for the Seminis and Emergent purchases, the company now expects net cash required by investing activities to be $2,100 million, compared to net cash required by investing activities of $1,800 million in the company’s earlier fiscal year 2005 guidance. As a result, the company now expects free cash flow to be negative $900 million for the fiscal year, compared with the previous estimate of negative $750 million following the announcement of the Seminis acquisition. (See reconciliation table with this news release.)

In conjunction with this announcement, Monsanto will hold a brief conference call at 9 a.m. CST (10 a.m. EST) today. Presentation slides and a simultaneous audio webcast of the conference call may be accessed by visiting the company’s web site at www.monsanto.com and clicking on “Investor Information.” Visitors may need to download Windows Media Player™ prior to listening to the webcast. Following the live broadcast, a replay of the webcast will be available on the Monsanto web site for three weeks.

For more information on Emergent Genetics, see the company profile available in conjunction with this announcement on Monsanto’s web site at: www.monsanto.com.

Monsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. For more information, please visit the company’s web site at www.monsanto.com.

Note to Editors: DEKALB and Asgrow are registered trademarks of Monsanto Company and its wholly owned subsidiaries. All other trademarks are the property of their respective owners.

Cautionary Statements Regarding Forward-Looking Information:
Certain statements contained in this release are “forward-looking statements,” such as statements concerning the company’s anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, the company’s actual performance and results may differ materially from those described or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, among others: the company’s exposure to various contingencies, including those related to Solutia Inc., litigation, intellectual property, regulatory compliance (including seed quality), environmental contamination and antitrust; successful completion and operation of recent and proposed acquisitions; fluctuations in exchange rates and other developments related to foreign currencies and economies; increased generic and branded competition for the company’s Roundup herbicide; the accuracy of the company’s estimates and projections, for example, those with respect to product returns and grower use of the company’s products and related distribution inventory levels; the effect of weather conditions and commodity markets on the agriculture business; the success of the company’s research and development activities and the speed with which regulatory authorizations and product launches may be achieved; domestic and foreign social, legal and political developments, especially those relating to agricultural products developed through biotechnology; the company’s ability to successfully market new and existing products in new and existing domestic and international markets; the company’s ability to obtain payment for the products that it sells; the company’s ability to achieve and maintain protection for its intellectual property; the effects of the company’s accounting policies and changes in generally accepted accounting principles; the company’s ability to fund its short-term financing needs; and other risks and factors detailed in the company’s filings with the U.S. Securities and Exchange Commission. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this release. The company disclaims any current intention or obligation to revise or update any forward-looking statements or any of the factors that may affect actual results, whether as a result of new information, future events or otherwise.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
The presentations of ongoing earnings per share (EPS) and free cash flow are not intended to replace net income, cash flows, financial position or comprehensive income, and they are not measures of financial performance as determined in accordance with Generally Accepted Accounting Principles (GAAP) in the United States. The following tables reconcile ongoing EPS and free cash flow to the respective most directly comparable financial measure calculated in accordance with GAAP.