With Monsanto's announcement in August of plans to acquire the Scott, Mississippi-based Delta and Pine Land company, the acquisition process is in the regulatory stage and moving as planned, according to Monsanto's Director of Public Affairs John Raines.
“We have filed with the appropriate regulatory bodies to have the acquisition reviewed from an anti-competitive, anti-trust standpoint and those efforts are now underway. The review is moving exactly as it should be,” he said. “The review will take several months and we are very comfortable with that.” The U.S. Justice Department is charged with the acquisition review.
If the acquisition is completed, Raines confirmed that Monsanto has full intention to divest its Stoneville and NexGen brands. “The emergent business that we purchased a little over a year ago will be divested once the acquisition is complete and meets all regulatory hurdles.” Monsanto is discussing the potential sale with several interested buyers.
“The D&PL acquisition is about gaining a faster footprint into the market place for the next generation of cotton traits. We have no intent to change our licensing philosophy,” said Raines. “We license our trait technologies to approximately 10 cottonseed companies and about 200 corn and soybean companies. We would certainly anticipate doing that in the future with the technologies including with the buyer of the Stoneville and NexGen assets.”
Raines said Monsanto and D&PL plan to operate as separate entities until the deal is closed. As a result, no changes will be made in how the two companies sell cottonseed this winter for the 2007 season. Each would sell their respective brands.
An approved acquisition would impact cotton growers in two ways.
“Providing farmers with a choice on these technologies and the brands that they want to plant is absolutely part of Monsanto's current and future commitment,” said Raines. “Whether the farmer wants to buy it in a Stoneville bag or a Delta Pine bag or one of the other brands, we want to make sure growers have the choice to buy the latest in trait technology.”
The second impact would involve the speed of moving trait technologies to market. For now, the two companies are running parallel, he said. D&PL is investing in breeding and trait integration utilizing Monsanto traits but also licensed traits from Syngenta and DuPont. Meanwhile, Monsanto is running facilities like the Idalou, Texas breeding station to move integration into genetics.
“When you're running two parallel companies like this, there is no question that efficiency and speed can be gained by not duplicating work,” Raines noted.
“By bringing D&PL's breeding germplasm into the Monsanto organization along with the traits business that we have today, we believe the latest trait technology can get to farmers even faster along with brand choice.”
Raines said Monsanto has not discussed with D&PL any potential closing of D&PL facilities. He predicted only minor changes.