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Biotech / Medical : Monsanto Co. -- Ignore unavailable to you. Want to Upgrade?

To: TheSlowLane who wrote (632)	11/30/1998 8:12:00 PM
From: Anthony Wong	Read Replies (1) \| Respond to of 2539

Monsanto Resolves Antitrust Issues Over DeKalb Buy (Update2) Bloomberg News November 30, 1998, 6:15 p.m. ET Monsanto Resolves Antitrust Issues Over DeKalb Buy (Update2) (Updates with closing share prices, Justice Department statement, approval of Delta & Pine Land shareholders) St. Louis, Nov. 30 (Bloomberg) -- Monsanto Co., one of the world's leading agricultural biotechnology companies, received U.S. Justice Department approval to acquire DeKalb Genetics Corp., clearing the way to complete the $2.3 billion transaction today. Monsanto agreed to allow more than 150 companies that buy its breeding seed to create hybrids incorporating genetic traits other than those developed by Monsanto for seven years, the U.S. Justice Department said. The company also agreed to license one of its plant-tissue transformation technologies to the University of California at Berkeley. The concessions mean that Monsanto's competitors have a better chance of introducing rival genetic technology, and seed companies have more freedom to incorporate that rival technology into their corn hybrids if they want to. The Justice Department's antitrust division said it had concerns that the combination of Monsanto's corn germ plasm business with DeKalb's would reduce competition without the licensing agreement. ''The spin-off of the transformation technology and the wide licensing of corn germ plasm will preserve competition in this newly emerging market for corn with transgenic improvements,'' Joel Klein, the Justice Department's antitrust chief, said in a statement. Monsanto, through its Holden's Foundation Seeds Inc. subsidiary, is the primary supplier of corn breeding-seed, the parent lines used to create new hybrids, to U.S. corn-seed producers, most of which are small, family-run companies. Holden's breeding seed is contained in about 35 percent of all corn acres planted in the U.S. Under its agreement with the Justice Department, Monsanto can't force seed companies who buy Holden's parent lines to only use Monsanto-developed genetic technology in those lines. The agreement means a seed company can buy seed from Holden's, but incorporate technology developed by, for example, AgrEvo GmbH, the joint venture of German chemical companies Hoechst AG and Schering AG. Licensing Technology In granting the University of California access to its plant transformation technology, Monsanto satisfies Justice Department concerns that Monsanto might gain a lock on two of the most popular technologies used in transforming plant cell tissue to produce varieties with improved genetic traits such as insect- resistance. 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. It's the agrobacterium technology that Monsanto has agreed to license to the University of California. The university can use the technology in its own research and it can sub-license the technology to others, including Monsanto's rivals. Monsanto has agreed to pay $100 per share for the remaining 60 percent of DeKalb it does not already own. DeKalb is one of the biggest corn-seed producers in North America, with 12 percent of the market. Monsanto shares rose 11/16 to close at 45 5/16. DeKalb shares rose 4 3/4 to 99 3/4. Monsanto is still negotiating with the Justice Department about its proposed acquisition of Scott, Mississippi-based Delta & Pine Land Co., the biggest U.S. cotton-seed producer. Delta & Pine's shareholders voted to approve the transaction, the company announced today. Delta & Pine has about 75 percent of the U.S. cotton-seed market. Monsanto already has about 16 percent through its ownership of Memphis-based Stoneville Pedigreed Seed Co. Most analysts expect Monsanto to sell Stoneville. --Toni Clarke in the Chicago newsroom (312) 692-3725 and James