DuPont, Monsanto strike RR2Y soybean deal
Seed industry watchers have pondered if DuPont Pioneer could keep pace with its Roundup Ready 1 soybeans vs. the newer traited Roundup Ready 2 Yield soybeans developed by Monsanto.
That question has been answered today through an announcement by DuPont and Monsanto regarding a series of technology licensing agreements. DuPont Pioneer officials say these agreements will expand the range of seed products the firm can offer farmers. The agreements include a multi-year, royalty-bearing license for Monsanto’s next-generation soybean technologies in the United States and Canada.
Through these agreements, DuPont Pioneer will be able to offer Genuity Roundup Ready 2 Yield soybeans as early as 2014, and Genuity Roundup Ready 2 Xtend glyphosate and dicamba tolerant soybeans as early as 2015, pending regulatory approvals.
DuPont Pioneer also will receive regulatory data rights for the soybean and corn traits previously licensed from Monsanto, enabling it to create a wide array of stacked trait combinations using traits or genetics from DuPont Pioneer or others. Monsanto will receive access to certain DuPont Pioneer disease resistance and corn defoliation patents.
Under these agreements, DuPont Pioneer will make a series of upfront and variable based royalty payments subject to future delivery of enabling soybean genetic material. It will make four annual fixed royalty payments from 2014 to 2017 totaling $802 million for trait technology, associated data, and soybean lines to support commercial introduction.
Additionally, beginning in 2018, DuPont Pioneer will pay royalties on a per unit basis of Genuity Roundup Ready 2 Yield and Genuity Roundup Ready 2 Xtend for the life of the agreement for continued technology access, subject to annual minimum payments through 2023 totaling $950 million.
DuPont is filing a Form 8-K containing additional information about the impact of these agreements on the company. A copy of the 8-K is available on the DuPont Investor Center at www.investors.dupont.com.
DuPont and Monsanto also agreed to dismiss their respective antitrust and first-generation Roundup Ready soybean patent lawsuits pending in U.S. federal court in St. Louis. Last summer, a federal court ruled DuPont and its Pioneer subsidiary infringed on a Monsanto patent and awarded Monsanto $1 billion in damages.
Additional terms of the agreements were not disclosed.