Monsanto Acquires Delta And Pine Land, Stoneville Sold To Bayer
31 May 2007 The two moves constitute a change in ownership for two of the most significant US cotton seed producers.
“We remain focused on closing our acquisition of this leading cotton seed brand as soon as possible and continuing its tradition of delivering innovation to the farm,” said Hugh Grant, chairman, president and chief executive officer of Monsanto. By combining Monsanto’s trait technology with Delta and Pine Land’s germplasm, cotton farmers are expected to realize enhanced benefits through the development of higher-yielding genetics and next generation technologies like water use efficiency, cotton fiber quality improvements, and protection against sucking insect pests.
Other Changes
In order to reach its agreement with DOJ, Monsanto has made several moves to divest other cotton seed properties, most notably the divesting of its Stoneville assets to Bayer.
In taking over the US assets of Stoneville, Bayer also gains access to high performing cotton products with insect-resistant and herbicide-tolerant traits developed by Monsanto, as well as state-of-the-art breeding and seed processing facilities in the US. The deal does not include Stoneville’s NexGen franchise, a regional cotton seed business in Texas, and other assets related to the NexGen business.
“As part of our long-term strategy for innovation and growth, we intend to strengthen the position of Bayer CropScience in the seeds market. The acquisition of the Stoneville activities in the US is a significant step in further expanding our successful cotton seed business, which forms part of our core seed crops along with canola, rice, and vegetables” said Werner Wenning, chairman of the board of management of Bayer AG.
The NexGen business that was not included in the sale will be sold to Americot for US $6.8 million, pending DOJ approval. As part of the agreement, Monsanto will sell certain conventional cotton parental lines that Delta and Pine Land acquired from Syngenta in 2006. The Americot and NexGen brands will continue to be licensed to use Monsanto’s cotton trait technologies.
Monsanto will also amend certain cotton licensing agreements to allow other cotton licensees to have the same terms that Delta and Pine Land had to use third-party trait technologies. Monsanto also will provide to Syngenta certain germplasm in Delta and Pine Land’s breeding pipeline that contains VIPCot trait technology, allowing Syngenta to continue its development of the technology.
During the interim period between when the company completes its acquisition and when it completes its divestitures, the Delta and Pine Land business will operate independently of Monsanto’s other commercial operations. Monsanto has been cooperating with the DOJ regarding the proposed divestitures and is now requesting final approval of those divestitures from the DOJ under the terms of its agreement. Once the divestitures of the Stoneville and NexGen businesses have been completed, Monsanto will begin working to combine the Delta and Pine Land business into its business operations.
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