No More Flower Power for Monsanto

Monsanto (NYSE: MON) will befriend anyone if it thinks the company will benefit. It recently sold its sunflower business to rival Syngenta for $160 million.

At more than two times last year's sales of $75 million, that's a pretty good price for Monsanto to get. But the cost savings from synergies might be worth it to Syngenta, which sold about $200 million worth of sunflower seeds last year. The move also considerably strengthens Syngenta's global lead in the sunflower market, should another seed producer want to challenge it.

The deal likely includes some technology for next-generation sunflowers, which might boost future sales and make the acquisition less costly. Since most of the market for sunflowers is for the oil in the seeds, producing hybrids with higher oil content or yields means Syngenta can charge farmers more for the seeds.

The sale reflects Monsanto's push to be a more focused company by selling off products on the fringe. Last year, the agriculture giant sold its Posilac cow hormone to its marketing partner, the animal health division of Eli Lilly.

Staying focused on corn, soybeans, cotton, vegetables and wheat is a good move for Monsanto. Now it simply needs to push out profitable innovations in those larger markets. Despite their looks, sunflowers just didn't have a bright enough future.