The company paid $1.4 billion in cash and assumed debt, plus a performance-based payment of up to $125 million payable by the end of fiscal 2007 for Seminis, which last year reported annual sales of $526 million.
Lori Fisher, spokesperson for Monsanto, told FoodNavigatorUSA.com that the decision was taken to purchase the company because of its position as a market leader, its suitability to benefit from Monsanto's breeding research and development, and the fact Seminis will immediately add value to Monsanto's profile.
She added that any plans to genetically modify the seed would be for the future.
"There could be a future potential for biottech, but this is not the reason why we bought Seminis, said Fisher.
In the near term, she explained, they will be looking at using Monsanto's advanced "non-biotech" breeding techniques - that have been applied mainly to bulk crops such as soy and corn - to help Seminis improve yields in certain crops. This should also reduce the time it takes to bring a new product to market.
Until now Monsanto has focussed on large-scale crops such as oilseed rape and corn and has had no profile in the vegetable seed market. This will be rectified by the purchase of Seminis.
Moreover, this acquision will give Monsanto a further foot in the door in Europe and the Middle East, which account for a heavy percentage of Seminis' sales, and to a lesser degree in Asia.
Seminis supplies more than 3500 seed varieties at present and Fischer said Monsanto had no plans to interfere with this range.
"Seminis are the leaders and we will let them run that business," said Fisher.
This purchase may have pushed Monsanto into number one place in the vegetable seed charts, but it will no doubt keep its eye on the ball to see what else is out there. Fisher said that they currently see opportunities for buying smaller US companies operating in the corn market.
Monsanto is shifting its work away from the herbicide chemical business, where competition has depressed prices, and further into the seed industry. Its losses narrowed in the first quarter to $40m from $97m a year ago. Revenues in the quarter were 7 percent higher at $1.1bn.
Seminis is currently privately owned, with the majority stake held by San Francisco based Fox Paine & Company, who bought control from the Mexican conglomerate Savia in 2002 for $650m.
Monsanto hopes that the acquisition will be completed some time later this year.