By Karl Plume
CHICAGO (Reuters) - U.S. seeds and agrochemicals company Monsanto Co (N:MON), which is in the process of being bought by Germany's Bayer AG (DE:BAYGn) for $66 billion, reported a better-than-expected quarterly profit on Wednesday, helped by strong demand for its soybean and corn seeds.
Monsanto's shares were up 1.6 percent at $115.84 after earlier hitting a 22-month high of $116.37.
The world's largest seed supplier said sales of corn seeds and traits rose 8 percent, while sales of soybean seeds and traits jumped 10.2 percent in the second quarter ended Feb. 28, as farmers in the United States prepare to plant the largest combined corn and soybean acres on record. Robust late-season seed demand in South America further propelled gains.
Monsanto agreed in September to a $128-per-share buyout offer from Bayer that, if approved by regulators, would create a company commanding more than a quarter of the world market for seeds and pesticides.
The deal came amid a wave of consolidation in the seeds and agrochemicals industry. Along with earlier mergers linking Dow Chemical (N:DOW) with DuPont (N:DD) and ChemChina with Syngenta AG (S:SYNN), the sector may ultimately be dominated by just four large companies.
ChemChina's acquisition of Syngenta won conditional approval from U.S. and European Union antitrust authorities this week. The EU signed off on the Dow and DuPont deal last week, provided certain conditions are met.
Monsanto said it remains confident its deal will pass regulatory muster and is on track to close by the end of 2017.
"We are heartened to see the deals ahead of us making progress," Chief Executive Hugh Grant said. "The unique thing about this deal is there a very limited amount overlap."
Reuters reported last month that the two companies were launching asset sales worth $2.5 billion as they seek regulatory clearance.
Monsanto, best known for Roundup herbicide and genetically-engineered corn and soybeans, also said it now expects full-year ongoing earnings per share at the high end of its forecast range of $4.50 to $4.90 per share for the 2017 fiscal year.
Net profit attributable to Monsanto rose to $1.37 billion, or $3.09 per share, in the second quarter, from $1.06 billion, or $2.41 per share, a year earlier.
Excluding one-time items, Monsanto earned $3.19 per share, topping analysts' average estimate of $2.79 per share, according to Thomson Reuters I/B/E/S.
Net sales rose 12 percent to $5.07 billion. Analysts on average had expected sales of $4.73 billion.