Monsanto Sees DeKalb Antitrust Concerns Resolved Within a Week
Bloomberg News
November 24, 1998, 3:38 p.m. ET
Monsanto Sees DeKalb Antitrust Concerns Resolved Within a Week
St. Louis, Nov. 24 (Bloomberg) -- Monsanto Co., one of the
world's leading agricultural biotechnology companies, expects to
resolve U.S. Justice Department concerns over its proposed $2.3
billion acquisition of DeKalb Genetics Corp. within a week.
St. Louis-based Monsanto said it is continuing its
discussions with the Justice Department and expects the remaining
concerns to be resolved by the time Monsanto's tender offer for
DeKalb's shares expires Nov. 30.
''We think that schedule will give us enough time to resolve
the Department of Justice's outstanding issues,'' said Lori
Fisher, a Monsanto spokeswoman.
The Justice Department is concerned that the acquisition
could give Monsanto a lock on two of the most popular
technologies used in transforming plant cell tissue to produce
crops with enhanced genetic traits such as insect-resistance or
herbicide-tolerance, people close to the discussions said Friday.
DeKalb, Illinois-based DeKalb has key patents covering a
cell-transformation technique based on micro-projectile
bombardment, in which a gun is used to shoot desired genes into a
cell. Monsanto has key patents covering a technology known as
agrobacterium, which carries the gene into a cell using a
bacteria.
Other transformation technologies exist, and neither
Monsanto nor DeKalb's patent claims are definitive. Both are
being either contested by competitors or reviewed by the U.S.
patent office. Still, the mere potential for Monsanto to dominate
these technologies, combined with its extensive seed assets,
is raising antitrust concerns at the Justice Department.
Regulators' concerns could be resolved if Monsanto and
DeKalb, one of the biggest U.S. corn and soybean-seed companies,
agree to license the technology to other seed companies, the
people familiar with the situation said.
Financing Deadline
Monsanto said it doesn't expect to have to extend the
deadline for financing the DeKalb acquisition beyond the current
Nov. 27 deadline. The company said yesterday it plans to raise
$1.5 billion in a share offering.
''I haven't heard of any extension on the financing,''
Fisher said. ''We should have the funds we need.''
Monsanto's shares rose 2 1/2 to 43 1/2 in late trading,
while DeKalb's shares rose 1 1/4 to 92.
--Toni Clarke in the Chicago newsroom (312) 692-3725 /mfr
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