Monsanto to buy out D&PL for $1.5 billion

PR Newswire
08-15-2006

Monsanto Company and Delta and Pine Land Company announced Aug. 15 that they have signed a definitive agreement whereby Monsanto will acquire Delta and Pine Land Company for $1.5 billion in cash. The transaction, unanimously approved by the boards of directors of both companies, is subject to D&PL shareowner approval, antitrust clearance and customary closing conditions. "Delta and Pine Land represents an excellent fit for our company as we look to bring value-added traits and high-quality seed to cotton growers around the world," said Hugh Grant, chairman, president and chief executive officer of Monsanto. "Delta and Pine Land has strong cotton genetics, and we believe Monsanto's leadership in providing the best cotton traits can improve on this already strong base." Tom Jagodinski, president and chief executive officer of D&PL, said, "Monsanto is a leading agricultural products company with a strong track record of growing and integrating diversified businesses. Our companies are a natural fit that will provide a complete platform of cutting-edge seed technologies to our global farmer customer base for years to come." Delta and Pine Land Company is a leader in the cotton seed industry and currently operates the largest and longest running private cotton seed breeding program in the world. The company's extensive plant breeding programs, including its diverse base of international germplasm, has enabled the company to develop and deliver improved cotton varieties for their farmer customers for more than 90 years. In recent years, D&PL has worked to expand its breeding efforts through numerous facilities across the United States and around the world. Upon completion of the acquisition, management of both companies believe the proposed combination creates the opportunity to strengthen both the domestic and international cotton seed business by enhancing penetration of second-generation biotech trait offerings and continuing to invest in breeding. Under the terms of the agreement, D&PL shareowners will receive $42 per share in cash. Monsanto intends to finance the acquisition with a combination of current cash on hand and a debt offering. The acquisition is expected to be accretive to Monsanto's earnings per share by the second year following closure of the acquisition, and D&PL should be a contributor to operating cash in the first year. The proposed acquisition requires review and approval by the appropriate regulatory authorities, including the U.S. Department of Justice. Because of the required regulatory approvals, no time frame for the closing of the transaction has been announced. As part of the proposed agreement, Monsanto has committed to divest the U.S. assets of its Stoneville cottonseed business if required to close the transaction. In conjunction with this announcement, Monsanto and Delta and Pine Land scheduled brief conference calls for their investors. The Monsanto call started at 9 a.m. CDT Aug. 15. Presentation slides and an audio webcast of the conference call will be available available online for three weeks at the Monsanto Web site. The Delta and Pine Land call is scheduled for 10:30 a.m. CDT Aug. 15. Participants inside the U.S. and Canada can access the call by dialing (800) 374-0532. International callers should dial (706) 634-0148 and enter participant code 4627536. The call will also be webcast at www.vcall.com/ and will be available for 90 days.