Monsanto is "likely" to divest itself of Stoneville to get federal approval of the proposed merger with Delta and Pine Land.
"If required, we're prepared to do so," says Ernesto Fajardo, Monsanto vice president of U.S. crop production. "It will be likely, so we are in the process of putting together a plan to divest Stoneville."
Earlier this week, Monsanto, a leader in traits, announced plans to acquire D&PL, a leader in the cottonseed business, for $1.5 billion in the cash. Monsanto acquired Stoneville last year. The two companies have been talking for the last few weeks about the merger.
Monsanto courted D&PL in the late 1990s, but the proposal fell through. Fajardo says the "competitive landscape has changed dramatically since we tried this last time. Back then, Monsanto was the only provider of technology."
The merger requires regulatory approval, including the OK from the U.S. Department of Justice. Industry observers have cited anti-trust concerns over the merger.
D&PL had earlier this year acquired rights for DuPont's GAT technology in cotton and soybeans. The Scott, Miss., based company also has rights to use the VIP cotton technology from Syngenta.
"We're open to looking at all these technologies," says Fajardo. "We will be able to sit back and see if there's any interest in going forward."
In the short term, however, there will be a "continuity in the seed supply," of the two firms as they iron out the particulars of the merger, says Randy Dismuke, D&PL senior vice president U.S. business and international operations. D&PL and Stoneville varieties will continue to compete in the marketplace until the merger.
D&PL has the No. 1 and No. 2 varieties on the market.
Fajardo says the merger will "increase the speed at which we develop germplasm and market traits."
No time table has been set for the closing of the transaction.