Monsanto Buys Big Data Weather Company

 

 

Monsanto Buys Weather Big Data Company Climate Corporation For Around $1.1B:

 

 Comment 39 Monsanto Buys Weather Big Data Company Climate Corporation For Around $1.1B


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Monsanto Buys Weather Big Data Company Climate Corporation For Around $1.1B

 

 

 

 

 

 

 

 

 

 

 

 

Today’s big acquisition is a huge agritech exit: Biotech company Monsanto has bought Climate Corporation for approximately $1.1 billion. While the Monsanto press release says $930 million, we’re hearing from investors that the actual price is past the $1 billion mark, because part of the all-cash deal will be paid out over time as an employee retention plan.

Climate Corporation is backed by Founders Fund, Khosla, Google Ventures, NEA, Index Ventures and Atomico. The company uses machine learning to predict the weather and other essential elements for agribusiness.

Monsanto focuses on providing seeds, biotechnology traits and crop production products for farmers around the world. The acquired company will continue to operate as the Climate Corporation, and Monsanto will leverage its big data expertise to optimize farming globally.

This is a pretty cunning move. It comes on the same day that Monsanto — one of the world’s largest argibusiness companies — reported a larger-than-expected, increased 4th quarter loss, of $249 million, or $0.47 per share.

And Monsanto is positioning this acquisition as part of a longer-term recovery plan, hoping that Climate Corporation’s climate change monitoring technology will help Monsanto manage future risk better. Monsanto has weathered (pun intended) a lot of bad PR over the years around issues like genetic modification and the general trammelling of smaller agricultural enterprises, so it will be interesting to see how Climate Corporation fits into that mix.

Here is a link to the press release on the Monsanto home page.

Good morning,

Monsanto just announced it has signed a definitive agreement to acquire The Climate Corporation for $930M. The full press release and supporting information is available on http://www.monsanto.com.

The acquisition will combine The Climate Corporation’s expertise in agriculture analytics and risk-management with Monsanto’s R&D capabilities, and will provide farmers access to more information about the many factors that affect the success of their crops.

We would like to invite you to join us later this morning for a call related to today’s announcement. We’ll use this call to provide details about the announcement and then have an opportunity to take some of your questions.

David Friedberg, chief executive officer of The Climate Corporation and Monsanto’s executive vice president of global strategy, Kerry Preete will provide an overview of the announcement.

The COO of Climate Corporation, Greg Smirin, says that the acquisition is an ideal fit for both companies: “As we all know, the weather is becoming more extreme. We found that we had kindred spirits with the folks at Monsanto; The data science that we have developed can be applied to improve seed production immensely.”

Climate Corporation CEO David Friedberg comes from an interesting tech background. He is an ex-Googler, where he served as one of its first corporate development execs. (One of the deals he tried to do while there was to convince Google to buy Skype, according to Index’s Neil Rimer, who wrote the first VC check for Climate Corporation’s $300,000 seed round. Obviously the Skype deal never happened, but Friedberg ushered in a number of other biggies for Google nevertheless.)

 

Small Group of Companies Have Enormous Power Over the World

A major scientific study identified a number of companies with outsized control over a huge portion of the earth's economy.

A major scientific study identified a number of companies with outsized control over a huge portion of the earth’s economy.

 

IN 2011, New Scientist reported that a scientific study on the global financial system was undertaken by three complex systems theorists at the Swiss Federal Institute of Technology in Zurich, Switzerland. The conclusion of the study revealed what many theorists and observers have noted for years, decades, and indeed, even centuries: “An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.” As one of the researchers stated, “Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market… Our analysis is reality-based.” Using a database which listed 37 million companies and investors worldwide, the researchers studied all 43,060 trans-national corporations (TNCs), including the share ownerships linking them. The mapping of ‘power’ was through the construction of a model showing which companies controlled which other companies through shareholdings. The web of ownership revealed a core of 1,318 companies with ties to two or more other companies. This ‘core’ was found to own roughly 80% of global revenues for the entire set of 43,000 TNCs. And then came what the researchers referred to as the “super-entity” of 147 tightly-knit companies, which all own each other, and collectively own 40% of the total wealth in the entire network. One of the researchers noted, “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network.” This network poses a huge risk to the global economy, as, “If one [company] suffers distress… this propagates.” The study was undertaken with a data set established prior to the economic crisis, thus, as the financial crisis forced some banks to die (Lehman Bros.) and others to merge, the “super-entity” would now be even more connected, concentrated, and problematic for the economy. The top 50 companies on the list of the “super-entity” included (as of 2007):

Barclays Plc (#1), Capital Group Companies Inc (#2), FMR Corporation (#3), AXA (#4), State Street Corporation (#5), JP Morgan Chase & Co. (#6), UBS AG (#9), Merrill Lynch & Co Inc (#10), Deutsche Bank (#12), Credit Suisse Group (#14), Bank of New York Mellon Corp (#16), Goldman Sachs Group (#18), Morgan Stanley (#21), Société Générale (#24), Bank of America Corporation (#25), Lloyds TSB Group (#26), Lehman Brothers Holdings (#34), Sun Life Financial (#35), ING Groep (#41), BNP Paribas (#46), and several others.

In the United States, five banks control half the economy: JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs Group collectively held $8.5 trillion in assets at the end of 2011, which equals roughly 56% of the U.S. economy. This data was according to central bankers at the Federal Reserve. In 2007, the assets of the largest banks amounted to 43% of the U.S. economy. Thus, the crisis has made the banks bigger and more powerful than ever. Because the government invoked “too big to fail,” meaning that the big banks will be saved because they are very important, the big banks have incentive to make continued and bigger risks, because they will be bailed out in the end. Essentially, it’s an insurance policy for criminal risk-taking behaviour. The former president of the Federal Reserve Bank of Minneapolis stated, “Market participants believe that nothing has changed, that too-big-to-fail is fully intact.” Remember, “market” means the banking cartel (or “super-entity” if you prefer). Thus, they build new bubbles and buy government bonds (sovereign debt), making the global financial system increasingly insecure and at risk of a larger collapse than took place in 2008. When politicians, economists, and other refer to “financial markets,” they are in actuality referring to the “super-entity” of corporate-financial institutions which dominate, collectively, the global economy. For example, the role of financial markets in the debt crisis ravaging Europe over the past two years is often referred to as “market discipline,” with financial markets speculating against the ability of nations to repay their debt or interest, of credit ratings agencies downgrading the credit-worthiness of nations, of higher yields on sovereign bonds (higher interest on government debt), and plunging the country deeper into crisis, thus forcing its political class to impose austerity and structural adjustment measures in order to restore “market confidence.” This process is called “market discipline,” but is more accurately, “financial terrorism” or “market warfare,” with the term “market” referring specifically to the “super-entity.” Whatever you call it, market discipline is ultimately a euphemism for class war.