Monsanto make a big move into cotton
Monsanto, one the giants of the agricultural seed business, got even bigger with the announced acquisition of Delta and Pine Land, a US-based maker of cotton seeds. The deal is for $1.5 billion.
The strange thing is that the two companies have been in litigation for six years due to the collapse of an earlier buyout that ran into antitrust objections. The proposal was made just as the civil trial was about to begin.
Some think the bid will trigger bids from other seed companies, including DuPont, Bayer, Syngenta, and UAP.
Monsanto is expanding its genetically modified, pesticide/herbicide resistant technology beyond corn and soybeans into new stocks. Monsanto already licenses some of its cotton bioengineering knowledge to other cotton seed companies, including Delta. According to the New York Times, 90% of US cotton is now genetically modified.
The move will also face antitrust review. The deal would give Monsanto over 50% of the US market for cotton seeds. The company acquired the Stoneville cotton seed business as part of its 2004 acquisition of. Emergent Genetics. It is assumed that Monsanto, if successful, will have to sell of some, if not all, of that business. Moreover, though it has failed before, but Monsanto will argue that it has more bioengineering rivals than in 1999. Add to that more permissive antitrust regulation.
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