Monsanto announced Thursday that it has reached an agreement with the U.S. Department of Justice that will allow it to complete its proposed acquisition of Delta and Pine Land Company. Monsanto plans to close its acquisition and resulting divestitures as soon as possible following the required approvals from the court and the DOJ.
"We believe our acquisition of Delta and Pine Land will help us facilitate greater innovation within the cotton industry by accelerating the number of products available to cotton farmers and generating new value for our business," says Monsanto CEO Hugh Grant.
Under terms of the agreement, Monsanto will be required to divest certain assets including its U.S. branded cotton seed business. As a result of this requirement, Bayer CropScience has entered into an agreement to purchase Stoneville Pedigreed Seed Company, a leading cotton seed provider, from Monsanto Company for $310 million, the company announced Thursday.
Bayer is currently the second largest cotton seed supplier in North America, and with the purchase of Stoneville it acquires a turnover of about $45 million as per Stoneville's 2005-06 fiscal year. Bayer will also gain access to insect-resistant and herbicide-tolerant Monsanto traits and to breeding and seed processing facilities.
Monsanto has also entered into a definitive agreement to sell its NexGen cotton seed brand and related business assets, to Americot for $6.8 million. As part of this agreement, Monsanto has agreed to sell to Americot certain conventional cotton parental lines that Delta and Pine Land acquired from Syngenta in 2006.
The acquisitions are all subject to Department of Justice approval.