Monsanto (MON) on a Roll: Signs Back-to-Back Agreements

Renowned Agricultural Chemicals firm Monsanto Company MON has entered into new agreements with DuPont and Sumitomo Chemical Company, Ltd. No financial detail was disclosed for either deal.

Agreement with Sumitomo Chemical

Monsanto and Sumitomo Chemical recently inked a new global agreement pertaining to the development and delivery of premium next generation weed control solutions. The innovative solutions would help farmers efficiently manage tough-to-control weeds. The deal would help Monsanto to create new herbicide-tolerant traits using Sumitomo Chemical's new generation Protoporphyrinogen oxidase (PPO) chemistry crop protection products that are strongly productive for balanced weed management.

Per the global agreement, the two companies would jointly work to create a combined system of biotechnology, germplasm and crop protection that would support the formation of a set of new generation weed control solutions. Under this deal, companies would join forces for the development, registration and commercialization related activities for Sumitomo Chemical’s key PPO chemistry, including the aforesaid new generation PPO herbicide. Also, the new PPO herbicide would be available in products offered by either of the two companies. 

Agreement with DuPont

Monsanto and DuPont have inked a new licensing agreement for a next-generation soybean technology of Monsanto to equip farmers with more choices. Per the deal, DuPont Pioneer would secure a royalty-bearing license to Intacta RR2 PRO technology in Brazil. The agreement would boost the value of Monsanto’s Intacta RR2 PRO technology that helps in offering new insect controlling options to the farmers. The license is currently subjected to endorsement by Brazilian regulatory authorities and would be issued for customary review.

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Moving Forward

After Jun 27, 2016 trading session Monsanto’s stock price stood at $99.98 per share. Year-to-date the stock has surged 14.5% since Apr 1, 2016. Let’s see if such strategic initiatives boost investors’ confidence and benefits the stock in the near term!

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Monsanto is slated to report its third-quarter fiscal 2016 results before the opening bell on Jun 29, 2016.

Other Stocks to Consider

Monsanto currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include First Majestic Silver Corp. AG, Albemarle Corporation ALB and B2Gold Corp. BTG. All the three companies currently sport a Zacks Rank #1 (Strong Buy).

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