), an agricultural products and solutions provider, recently
announced a new deal with
E. I. du Pont de Nemours and Company
), relating to Monsanto's Roundup technologies.
Subject to approvals, the deal will empower DuPont to offer
Genuity Roundup Ready 2 Yield soybeans and Genuity Roundup Ready
2 Xtend glyphosate and dicamba tolerant soybeans by 2014 and
2015, respectively, in the U.S. and Canada. In return, Monsanto
will gain access to certain disease resistance and corn
defoliation patents of DuPont Pioneer, in addition to the
Monsanto will receive royalties worth $1.752 billion from
DuPont, starting from 2014 to 2023 for both the technologies
used. DuPont will make annual royalty payments totaling $802
million, in the timeframe between 2014 and 2018. Also, payments
for use of both the Roundup technologies will be made on a
per-unit basis for the life of the agreement. Beginning in 2018
until 2023, a minimum of $950 million royalty will be paid.
This deal led Monsanto and DuPont withdraw their lawsuits
against each other, concerning the unauthorized use of Roundup
Ready technology in its corn and soybeans by the latter. The
lawsuits filed in 2009 were withdrawn on Mar 26, 2013, following
the new deal, which will result in an expansion of their seeds
Owing to the arrangement, Monsanto's shares also reached a new
52-week high of $105.79 on Mar 27, above the last 52-week high of
$104.96 reached on Mar 15. Monsanto has generated a return of
approximately 11.1% year-to-date on a calendar year basis.
Monsanto is releasing its fiscal second-quarter 2013 results
on Apr 3. The current Zacks Consensus Estimate for the quarter is
$2.55, representing a year-over-year growth of 11.9%.
Monsanto currently bears a Zacks Rank #2 (Buy). Other
agricultural chemicals stocks worth a look are
CVR Partners, LP
); both carrying a Zacks Rank #1 (Strong Buy).
BALCHEM CP CL-B (BCPC): Free Stock Analysis
DU PONT (EI) DE (DD): Free Stock Analysis
MONSANTO CO-NEW (MON): Free Stock Analysis
CVR PARTNERS LP (UAN): Free Stock Analysis
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