In what may seem like Deja Vu all over again, crop-biotech leader Monsanto Co.'s second attempt in a decade to acquire Delta & Pine Land Co. - the nation's last publicly listed traditional seed company - has again run into major opposition. Though Wall Street has essentially already assumed the merger is a done deal, pricing Delta & Pine stocks (pictured) at just a shade under Monsanto's $42-per-share offer price, there is growing pressure for the justice department to get involved on antitrust grounds. Monsanto crop-biotech competitors DuPont and Swiss-based Syngenta AG, both in the midst of trying to gain market share from Monsanto, have lobbied for Justice Department involvement as have the governors of several southern and midwest states. DuPont said in a statement, "We have serious concerns about the impact that it would have on farmers, the agriculture industry and ultimately consumers." The last time the merger was proposed, the Clinton administration's Justice Department looked into the case for 19 months without a resolution leading to the ultimate dissolution of the merger, followed by a two-billion dollar lawsuit against Monsanto. To cover its bases this time, Monsanto has offered Delta & Pine $600 million if the deal doesn't have justice department approval by August 2007; the company has also offered to divest from its cottonseed business in an attempt to avoid the antitrust charges. Delta & Pine is the nation's leading cottonseed provider.
• Sources: WSJ, AP, Monsanto-Delta & Pine Merger [TheStreet]. Conference call transcripts: Monsanto F4Q06 (Qtr End 8/31/06)
• Related commentary: Tense Mating Dance Between Monsanto and D&PL Ends in a Merger, Monsanto 10-K: Execs Will Pay If They Cook the Books
• Potentially impacted stocks and ETFs: Monsanto (MON), Delta & Pine Land Company (DLP), DuPont (DD), Syngenta AG (SYT). ETFs: iShares Dow Jones US Basic Mater. (IYM), Vanguard Materials ETF (VAW), Materials SPDR (XLB)