Monsanto and DuPont Dismiss Lawsuit, Agree on $1.75 Billion Licensing Deal

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DuPont (NYSE: DD  ) and Monsanto (NYSE: MON  ) have come to terms on a multiyear, multitechnology agreement that has DuPont making annual royalty payments to Monsanto totaling $1.752 billion, from 2014 through 2023. DuPont and Monsanto announced the new licensing arrangement in joint press releases.

The deal calls for DuPont Pioneer, a Dupont business, to offer Monsanto's soybean technologies in the U.S. and Canada, specifically the Genuity Roundup Ready 2 Yield by 2014, and the Genuity Roundup 2 Xtend soybeans by 2015, pending regulatory approvals. In addition to the royalty payments, Monsanto will receive access to DuPont Pioneer's disease-resistant and corn-defoliation patents.

The deal's financial arrangement has DuPont making annual royalty payments from 2014 to 2018, totaling a minimum of $802 million. DuPont will continue making annual payments to Monsanto on a per-unit basis for the life of the agreement beginning in 2018, subject to royalty payments totaling at least $950 million, until 2023.

The joint announcements also say DuPont and Monsanto have agreed to dismiss their respective antitrust and Roundup Ready soybean patent lawsuits.

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  • Report this Comment On March 27, 2013, at 5:57 PM, funfundvierzig wrote:

    Investors are viewing this settlement as very favourable to Monsanto, with MON shares soaring, and DD shares in the red. Why?

    In order to put to bed the highly cogent claims of Monsanto that DuPont had unethically, deliberately, and fraudulently infringed upon Monsanto's superior patent-protected seed technology, DuPont agreed to cough up a minimum of circa $2 billion in license fees payable to Monsanto in coming years. That means, in our opinion, the cost of producing DuPont Pioneer seeds goes up, with margins squeezed, and DuPont earnings go down. ...funfun..

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DocumentId: 2335214, ~/Articles/ArticleHandler.aspx, 10/1/2016 9:59:16 AM

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9/30/2016 4:01 PM
DD $66.97 Up +0.60 +0.90%
DuPont CAPS Rating: ****
MON $102.20 Up +0.41 +0.40%
Monsanto CAPS Rating: ***