Monsanto explained that because the acquisition represents a long-term investment in research and development and breeding, it does not expect the acquisition to contribute to earnings until the middle of the next decade. The company additionally expects a purchase-accounting adjustment for in-process R&D.

"Global demands for raw sugar and biofuels are beginning to rise at a faster pace than the current production levels in sugarcane, a crop that is essential to meeting these demands," said Carl Casale, executive vice president of global strategy and operations for Monsanto. "Similar to our work with technology collaborators, we expect the additions of CanaVialis and Alellyx will allow us to combine our breeding expertise with key large-acre crops with their breeding expertise in sugarcane. Our goal with this approach is to increase yields in sugarcane while reducing the amount of resources needed for this crop's cultivation, just as we're doing now for corn, soybeans and cotton. We view this as a significant opportunity over the longer term to supplement our ongoing commitment to corn as an ethanol feedstock, diversify our crop technology portfolio and provide innovations to such a vital crop as sugarcane."

"While we see this move as a long-term investment and a commitment to populating our research and development pipeline, we expect to receive the near-term benefit of access to leading sugarcane germplasm technologies, which can help us accelerate the timeframe for bringing trait technologies to market, possibly around 2016, and bring this germplasm to other sugarcane- growing areas of the world," said Casale.

The global demand for sugar has intensified in recent years. The International Sugar Organization estimated earlier this year that the world will consume 3.9 million tons more sugar than it will produce in 2008-2009. And both the United Nations' Food and Agricultural Organization (FAO) and the Food and Agricultural Policy Research Institute (FAPRI) see sugar consumption increasing faster than production over the next decade. As for the world's growing ethanol demands, the FAO and the Organisation for Economic Co- operation and Development project that global ethanol production will increase rapidly and reach roughly 125 billion liters in 2017, twice the quantity produced in 2007.