Monsanto Announces Two Partnerships
By CHRISTOPHER LEONARD
Associated Press, 20 June 2007
Monsanto Co. announced two partnerships Wednesday to develop and license new genetically engineered crops.
The world's biggest seed company said it formed a long-term licensing agreement with rival Bayer CropScience, a division of Germany-based Bayer AG.
The companies said they will share technology for pest-resistant and herbicide-resistant seeds.
Bayer CropScience said it will grant St. Louis-based Monsanto a royalty bearing, non-exclusive license for its LibertyLink herbicide-resistant corn and soybean seeds.
The companies also amended Monsanto's existing non-exclusive, royalty-bearing license to use Bayer CropScience's Dual Bt technology, which makes plants resistant to pests.
The companies did not disclose details of the licensing agreements.
The deal could help Bayer CropScience broaden the use of its patented genetic traits by gaining access to Monsanto's broad line of engineered seeds, said Friedrich Berschauer, chairman of the Board of Management of Bayer CropScience.
"These agreements are an important step for Bayer CropScience as they could significantly broaden the availability of our LibertyLink technology outside our core cotton and canola seed business," Berschauer said.
News of the deal came one day after Monsanto announced the sale of two of its cotton seed divisions to Bayer CropScience for $310 million.
The sale was required by the U.S. Department of Justice as part of Monsanto's merger with cotton seed producer Delta and Pine Land (nyse: DLP - news - people ). The Department said Monsanto needed to divest its Stoneville and NexGen cotton seed divisions so the merger with Delta did not violate U.S. antitrust law.
Bayer's U.S. shares fell $1.09 to $75.29 Wednesday, while Monsanto shares fell $1.45 to $65.99.
Monsanto also announced a new partnership Wednesday with Athenix Corp., a biotechnology firm based in Research Park, N.C.
The companies entered a three-year research collaboration to develop new insect control technology for Monsanto's major crop lines, including corn, soybeans and cotton. The companies did not disclose financial terms of the partnership.
The companies plan to find new genes that could make plants resistant to such insects as the cotton pest Lygus and stinkbug, a soybean pest.