Lilly To Purchase Monsanto Cow-Hormone Unit For $300M

Posted by Brian Gould Wed, 20 Aug 2008 19:02:00 GMT

Eli Lilly & Co. (LLY) agreed to pay $300 million for a Monsanto Co. (MON) business that produces a controversial hormone used to boost milk production in dairy cows. Under the agreement, Lilly will acquire the commercial business for the Posilac brand, including the intellectual property and a Georgia plant. In addition to the $300 million upfront payment, Monsanto will receive “contingent consideration,” the companies said. Monsanto had disclosed plans to sell the unit two weeks ago, without providing details. The announcement came after consumer-health groups had raised questions about the health effects of the hormone, which is a natural protein produced in the pituitary glands of cows. At the time, Monsanto said that sales for Posilac were strong and that the sale of the business wasn’t in response to critics.