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JUSTICE DEPARTMENT APPROVES MONSANTO'S
ACQUISITION OF DEKALB GENETICS CORPORATION
Divestiture of Transformation Technology Rights and
Licensing of Corn Germplasm Implemented
WASHINGTON, D.C. -- The Department of Justice today approved Monsanto
Company's $2.3 billion acquisition of DeKalb Genetics Corporation after Monsanto
implemented certain changes to their deal that will ensure that biotechnology developments in
corn remain competitive.
After the Department's Antitrust Division raised competitive concerns, Monsanto spun
off its claims to a recently developed technology used to introduce new genetic traits into corn
seed -- called agrobacterium-mediated transformation technology -- to the University of
California at Berkeley. Monsanto also entered into binding commitments to license its Holden's
corn germplasm -- the type of corn genetic material that is used to breed the hybrid seed that
farmers plant -- to seed company customers for the purpose of introducing new transgenic traits
in corn.
Transgenic corn has been genetically altered so that it has certain traits, such as insect
resistance or herbicide tolerance. Transformation technology is used to insert a desirable genetic
trait into corn seed.
"American farmers feed the nation and the world. Competition in biotechnology ensures
that those farmers have access to the latest innovations in seed technology. The action taken
today will ensure the producers can get the best corn seeds at the lowest prices," said Joel I.
Klein, Assistant Attorney General in charge of the Antitrust Division. "The spin-off of the
transformation technology, and the wide licensing of corn germplasm, will preserve competition
in this newly emerging market for corn with transgenic improvements."
According to the Department, the proposed combination of DeKalb's intellectual
property relating to the leading method of corn transformation, biolistics, and Monsanto's claims
to intellectual property in the emerging agrobacterium method, raised concerns about competition
for corn transformation. Biotechnology developers need access to transformation technology on
competitive terms, so they can introduce new traits into corn seed. The spin-off of Monsanto's
agrobacterium claims to the U.C. Berkeley, an independent entity with experience in the
exploitation of such intellectual property, will ensure that biotechnology developers will not be
deprived of future competition in corn transformation technology.
In addition, the proposed combination of Monsanto's corn germplasm with DeKalb's
corn germplasm raised competitive concerns. Biotechnology developers wanting to introduce
improvements in corn require access to elite germplasm such as that held by the two firms.
Monsanto's licensing of Holden's corn germplasm to over 150 seed companies that are current
Holden's customers for use in creating corn hybrids with transgenic improvements will ensure
that the merger does not reduce competition in biotechnology developments in corn.
Monsanto Company, headquartered in St. Louis, Missouri, is a life sciences company that
conducts research and development in biotechnology in corn and owns and operates its retail
corn seed company, Asgrow, and its corn germplasm firm, Holden's Foundation Seeds. In 1997,
it had net sales of approximately $7.5 billion from these and other operations.
DeKalb Genetics Corporation, headquartered in DeKalb, Illinois, is a retail corn seed
company that owns corn germplasm and conducts research and development in biotechnology in
corn. In 1997, it had total revenues of approximately $450 million.
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