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BUSINESS: Monsanto-Delta deal nears U.S. antitrust OK

------------------------------- GENET-news -------------------------------
TITLE:  Monsanto-Delta deal nears U.S. antitrust OK
SOURCE: Reuters
AUTHOR: Peter Kaplan
DATE:   17.05.2007

Monsanto-Delta deal nears U.S. antitrust OK

WASHINGTON (Reuters) - U.S. antitrust authorities are poised to approve
plans by biotech crop developer Monsanto Co. to buy Delta and Pine Land
Co. on the condition that the companies divest some key assets, a source
familiar with the deal said on Thursday.

Antitrust officials at the Justice Department are working out final
details of a settlement deal that would require the companies to sell
some genetic material owned by Delta and Pine that is used to develop
new cotton seed varieties, the source said.

The genetic material, known as germplasm, would be sold to a rival
company in the business, the source said.

Monsanto would also follow through on previously announced plans to sell
its Stoneville cotton seed brand to get approval of the $1.5 billion
deal, according to the source, who spoke on condition of anonymity.

Justice Department spokeswoman Gina Talamona said the investigation of
the deal was ongoing and declined to make further comment.

Monsanto spokesman Lee Quarles said: "The Department of Justice's review
is not yet complete and we look forward to their decision." He declined
to comment further.

The conditions imposed by the department would resolve its concerns
about how the combination could affect competition in the cotton seed
business, the source added.

Monsanto's acquisition of Delta and Pine has provoked opposition from
farm and consumer groups as well as competitors including DuPont Co. and
Syngenta AG.

The deal would give Monsanto a dominant position in the $40 billion
cotton seed market, boosting its share of the market from about 12
percent to between 50 percent and 60 percent.

Last year, Monsanto's biotech crop traits were planted on roughly 75
percent of U.S. cotton acres, according to data from Monsanto and the
U.S. Agriculture Department.

The genetically modified traits are incorporated into seeds to help them
resist insects and tolerate herbicides.

Scott, Mississippi-based Delta and Pine operates the largest and longest-
running private cotton seed breeding program in the world.

Rivals complained that the deal would give Monsanto too big a share of
biotech traits in some crops and harm growers by reducing seed options.

The National Black Farmers Association has said it will file a lawsuit
to stop the deal if it receives Justice Department approval.

And a consumer group, the Center for Food Safety, has also lobbied
against the merger, saying cotton seed prices have risen 240 percent
from 1995 to 2005 due primarily to fees charged for genetically
engineered traits.

But Monsanto has countered that the deal would allow it to enhance and
improve cotton seed applications to benefit farmers.

Monsanto has argued that competition in both seeds and technology is
flourishing and that the deal with Delta and Pine would result in more
and better crop technology.

This is the second attempted merger between the two companies, which
operate both as rivals and as business partners through licensing
agreements. They announced a merger in 1998, but it fell through in 1999.

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