SAN FRANCISCO -- Chevron Corp. said Friday it has sold its Ortho-brand lawn-and-garden products business to Monsanto Co. for about $400 million.
Chevron, the nation's fourth-biggest oil company, said the sale is part of its long-term strategy to focus on its core businesses of oil, natural gas and petrochemicals.
Chevron said the sale includes working capital and Ortho's manufacturing facility in Ft. Madison, Iowa.
Chevron will continue to own its Maryland Heights, Mo., factory and manufacture for St. Louis-based Monsanto. The 175 employees at the Maryland Heights plant will remain Chevron employees.
Ortho will continue to be headquartered in San Ramon, Calif. About 300 of the remaining 400 Ortho employees have been offered jobs with Monsanto.
'We are pleased that Chevron has been able to realize excellent value from the sale of Ortho,' said John Peppercorn, Chevron Chemical Co. president.
San Francisco-based Chevron said it expects to record a significant gain from the sale during the second quarter.
Chevron Corp., along with most other U.S. oil companies began cutting its domestic non-core operations early last year. It has set a goal of cutting its annual operating costs by $600 million by mid-1993 and cut its corporate-wide staff by about 5,500 to about 50,000.
Some of the cuts came through disposing of hundreds of marginal oil properties, reducing operations at its Port Arthur, Texas refinery and slicing jobs from its payroll, including 450 at its corporate headquarters and another 300 at its information technology services operation.
But Chevron has also increased its capital and exploratory spending program 5 percent this year to $4.9 billion and pledged to continue to divest non-strategic or poorly performing operations.
Chevron earned $501 million on $9.84 billion in revenues in the first quarter.
Ortho's products include residential fertilizers, pest control products and equipment and gardening and do-it-yourself books.
'The Ortho line of products fits well with Monsanto's lawn and garden business,' said Hendrik Verfaillie, vice president of Monsanto and president of its Agricultural Group. Monsanto products include Roundup herbicide, Greensweep lawn care products, and Polysect, a European insecticide.
Monsanto said the Ortho businesses will be merged with its Residential Products division and renamed the Solaris Group. It will operate as a division of Monsanto's Agricultural Group.
'The purchase of Ortho allows Monsanto to expand its successful international lawn and garden products business into a wider range of products and services aimed at the consumer,' said Jan Novak, vice president of Solaris Group. 'We expect to accelerate sales growth by combining the different strengths of the two industry leaders.'
Monsanto, which specializes in chemical products, earned $141 million on sales of $1.94 billion in the first quarter.
