The Rising Influence of Rising Affluence

[DewDiligence]

DD/MON settle all litigation—DD to pay MON $1.75B* in royalties:

http://finance.yahoo.com/news/dupont-monsanto-reach-technology-licensing-120000468.html

DuPont and Monsanto announced today a series of technology licensing agreements that will expand the range of seed products they 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 [MON’s top-of-the-line soybean product] 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 [DD’s stacking on MON’s traits with DD’s own traits, which was forbidden in the original license agreement, was a major source of prior litigation] using traits or genetics from DuPont Pioneer or others [“or others” is the key phrase]. Monsanto will receive access to certain DuPont Pioneer disease resistance and corn defoliation patents.

…DuPont Pioneer will make a series of upfront and variable based royalty payments [to MON] 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. [I.e. DD has committed to pay MON a minimum of $802M+$950M = $1.75B.]

…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.

This is an excellent outcome for Monsanto, IMO. MON not only bags a large stream of guaranteed royalties from DD, but also frees itself from the antitrust threat, which was a major nuisance and source of legal expenses. All told, MON certainly deserves the 4% pop it is enjoying today, IMO.

Please see #msg-77460721 for background information on these cases.

*The net measurable cumulative benefit to MON is $750M insofar as today’s agreement nullifies the $1B verdict that MON previously won from DD in the Roundup Ready case (#msg-78109993).