Monsanto And DuPont Sign Multi-Year Herbicide Supply Deal
Zacks Investment Research | Jul 07, 2016 10:07PM ET
Premium agricultural chemical providers Monsanto Company (NYSE:MON) and E. I. du Pont de Nemours and Company (‘DuPont’) (NYSE:DD) have inked a multi-year supply deal in Canada and the United States for the weed destroyer, dicamba. The financial details of the deal have not been disclosed.
In sync with the Roundup Ready Xtend Crop System, Monsanto’s less volatile dicamba formulations would be combined with DuPont’s VaporGrip Technology. The new variant of herbicide, which will be retailed under the name DuPont FeXapan herbicide plus VaporGrip Technology, would help soybean farmers better manage tough-to-control and glyphosate-resistant broadleaf weeds.
Prior to this, in 2013 DuPont had signed a licensing deal to incorporate Monsanto’s Xtend trait in its own seeds.
Notably, extensive planting of glyphosate-forbearing soybeans, corn and cotton in the United States has resulted to the growth of herbicide-resistant weeds. This has, therefore, heightened the need for more advanced and effective weed killers.
Recent Growth Initiatives
Monsanto intends to boost its financial fundamentals through new investments and product portfolio solidification. The company recently invested $1 billion in a dicamba manufacturing facility in Luling, LA. The initiative was undertaken for mitigating the products booming demand in the coming years. Earlier, Monsanto had announced that the Xtend platform is its biggest technological innovation till date. In 2016, the Xtend soybean trait was planted in roughly 1 million acres of land in the United States. Monsanto anticipates Xtend soybeans to be planted across almost 15 million acres of land in the next season and 55 million acres by the end of 2019.
Monsanto’s shares gained 1.25% to $100.64 as of Jul 7, 2016. The upside reflects investors’ confidence on the stock.
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