Monsanto (left) agreed to acquire D&PL (right) last year. It suggested that it would have to divest the US assets of Stoneville, but still faced criticism over the effect that the move would have on competition in the cotton seed sector

Monsanto has completed its planned acquisition of the US cotton seed company, Delta and Pine Land (D&PL - Scott, Mississippi), for approximately $1,500 million. The move follows an agreement with the US Department of Justice (DoJ) to divest its existing branded US cotton seed business to address antitrust concerns. The company will sell its Stoneville brand and related assets to Bayer CropScience for $310 million. It is to sell its NexGen brand and germplasm to US cotton seed company Americot (Lubbock, Texas) for $6.8 million.

The DoJ filed a lawsuit to block Monsanto's purchase of D&PL. The acquisition could have "caused higher prices to US farmers for traited cotton seed and would have blocked or delayed development of traits for cotton seed that would compete with Monsanto", the DoJ says. However, a consent decree filed with the US District Court in Washington, DC, would resolve the lawsuit and the DoJ's antitrust concerns. Monsanto hopes to complete the disposal of the Stoneville and NexGen businesses "as soon as possible" after DoJ and court approval.

Monsanto's Bollgard insect-protected technology provides farmers with in-the-seed protection against insects. Photo: Monsanto

Monsanto agreed to acquire D&PL last year (Agrow No 502, p 1). It suggested that it would have to divest the US assets of Stoneville, but still faced criticism over the effect that the move would have on competition in the cotton seed sector (Agrow No 509, p 3). Monsanto has pledged to run D&PL as an independent business until the Stoneville and NexGen divestments are completed. It will then combine D&PL into its existing operations. "We believe our acquisition of Delta and Pine Land will accelerate the discovery and delivery of innovation to cotton farmers and the cotton industry," says Monsanto's chairman, president and CEO, Hugh Grant.

As part of the Bayer deal, Monsanto has agreed to sell to Bayer certain conventional cotton lines that it will acquire from D&PL. Monsanto will retain a non-exclusive licence to these lines. It will continue to license its cotton trait technologies to Bayer for its Stoneville and FiberMax brands. Under the Americot deal, Monsanto will sell certain cotton lines to Americot that D&PL acquired from Syngenta in 2006 (Agrow No 497, p 1). The Americot and NexGen brands will continue to be licensed to use Monsanto's traits.

Monsanto has agreed to amend certain cotton licensing agreements so that other cotton licensees have the same terms that D&PL enjoyed with regard to third-party trait technologies. Monsanto will provide Syngenta with 43 D&PL cotton lines containing insect resistance VipCot technology. This action is to allow Syngenta to continue its development of the technology, Monsanto points out. D&PL had planned to begin marketing VipCot cotton by 2009.

The Stoneville business to be acquired by Bayer recorded sales of about $45 million in fiscal 2006. The new germplasm and geographic coverage of the Stoneville business "ideally complement" Bayer's existing cotton seed business, which is the second-largest in North America, the company points out. "The acquisition of the Stoneville activities in the US is a significant step in further expanding our successful cotton seed business," says Bayer chairman Werner Wenning.

Americot says that its deal with Monsanto would make it the third-largest cotton seed company in the US. "We will have one of the largest germplasm bases available.

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